Economic recovery in the euro area is firming and inflation expectations are almost in sync with the central bank’s aim, and only a combination of monetary policies and structural reforms can help sustain this cyclical improvement, the European Central Bank Chief Economist Peter Praet said on Thursday.
“The incoming data suggest that the ECB’s measures are now gaining traction. The recovery is firming, and inflation expectations seem to be moving towards values more consistent with our aim,” Praet said in a speech in Berlin, text of which was published on the ECB website.
“But it is only through actions by other stakeholders – governments, social partners and firms – that this cyclical improvement can be made permanent.”
Citing both the hard and soft data, the policymaker said the economic activity is gaining momentum and is likely to strengthen over the coming months.
“We are therefore seeing the beginnings of a cyclical recovery. But it is not yet a structural one,” he said.
Results from the latest purchasing managers’ survey, released by Markit on Thursday, showed that Eurozone private sector growth pulled back from March’s 11-month high in April as concerns over Greece crisis started to weigh on economic activity despite the boost from the ECB’s massive quantitative easing.
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