The outlook for growth in the euro zone is moderate, and inflation pressures are expected to remain under control, the European Central Bank said today.
The editorial of its monthly bulletin was a close repeat of the ECB's monetary policy statement last Thursday when the central bank left official interest rates on hold at 2 per cent, where they have been for two years now.
The ECB repeated that it expected inflation pressures to remain contained in the medium term, although it would remain vigilant on possible upside risks, mainly from oil.
"Most recent indicators for economic activity remain, on balance, on the downside," the ECB said, although it expected growth to gradually improve.
"The exceptionally low level of interest rates across the entire maturity spectrum continues to provide considerable support to economic growth in the euro area, which currently shows only moderate dynamics."
The ECB said the moderation in activity since the middle of last year was largely due to oil prices. A weakening economic outlook in the 12-nation zone has prompted calls for the ECB to cut interest rates.
ECB Governing Council member Axel Weber said yesterday the ECB was not leaning towards either raising rates or lowering them, and a euro zone monetary source said rates could move either way.