mario draghi : ecb press conference – introductory statement introductory statement by mr mario draghi, president of the european central bank, frankfurt am main, 5 september 2013. * * * ladies and gentlemen, i am very pleased to welcome you to our press conference. i will now report on the outcome of today ’ s meeting of the governing council. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. incoming information and analysis have further underpinned our previous assessment. underlying price pressures in the euro area are expected to remain subdued over the medium term. in keeping with this picture, monetary and, in particular, credit dynamics remain subdued. inflation expectations for the euro area continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 % over the medium term. at the same time, real gdp growth in the second quarter was positive, after six quarters of negative output growth, and confidence indicators up to august confirm the expected gradual improvement in economic activity from low levels. our monetary policy stance continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability and promoting stable money market conditions. it thereby provides support to a gradual recovery in economic activity. looking ahead, our monetary policy stance will remain accommodative for as long as necessary, in line with the forward guidance provided in july. the governing council confirms that it expects the key ecb interest rates to remain at present or lower levels for an extended period of time. this expectation continues to be based on an unchanged overall subdued outlook for inflation extending into the medium term, given the broad - based weakness in the economy and subdued monetary dynamics. in the period ahead, we will monitor all incoming information on economic and monetary developments and assess any impact on the medium - term outlook for price stability. with regard to money market conditions, these have also been influenced by a gradual reduction in excess liquidity. repayments of funds taken up in the context of the three - year longer - term refinancing operations reflect improvements in financial market confidence, some reduction in financial market fragmentation and the ongoing deleveraging by euro area banks. we will remain particularly attentive to the implications that these developments may have for the stance of monetary policy. let me now explain our assessment in greater detail, starting with the economic analysis. following six quarters of negative output growth, euro area real gdp rose, quarter on quarter, by 0

slower pace of quarter - on - quarter real gdp growth in the second half of this year than in the first. looking further ahead, the conditions remain in place for the euro area economy to grow at solid rates around potential, although some volatility in the quarterly growth rates is likely to emerge around the turn of the year, mainly reflecting the impact of an increase in indirect taxes in a large euro area country in january 2007. global economic activity has become more balanced across regions and remains robust, thereby providing ongoing support for euro area exports. investment is expected to remain dynamic, benefiting from an extended period of very favourable financing conditions, balance sheet restructuring, accumulated and ongoing strong earnings, and gains in business efficiency. consumption growth in the euro area should also strengthen further over time, in line with developments in real disposable income, as employment conditions continue to improve. risks to the outlook for economic growth are broadly balanced over the shorter term, taking into account, in particular, the recent slowing down in the us economy on the one hand and the recent fall in oil prices on the other. the oil price decline – if it were to prove lasting – has the potential to lead to somewhat stronger demand and output growth than embodied in our current baseline scenario for activity in the coming quarters. over the longer term, risks to growth continue to lie on the downside, relating mainly to the possibility of a renewed increase in oil prices, fears of a rise in protectionist pressures, especially after the suspension of the doha round of trade talks, and possible disorderly developments owing to global imbalances. as regards price developments, according to eurostat ’ s flash estimate annual hicp inflation was 1. 6 % in october, after having declined to 1. 7 % in september from 2. 3 % in august. the recent decline in inflation is the combined result of favourable base effects, given in particular the strong rise in oil prices a year ago, and the recent significant fall in oil prices. while the outlook for energy prices remains uncertain, on the basis of current energy prices and the higher quotations on futures markets, inflation rates are likely to increase again in the next few months and early 2007. as a consequence, we expect a high degree of short - term volatility in the annual hicp inflation rate. looking through this volatility, however, hicp inflation will remain elevated at a level above 2 % on average in 2006 and is likely to remain so in 2007. risks to