euro area real gdp increased by 0. 5 %, quarter on quarter, in the first quarter of 2016, after 0. 3 % in the last quarter of 2015. growth continues to be supported by domestic demand, while being dampened by weak exports. the latest data point to ongoing growth in the second quarter, though possibly at a lower rate than in the first quarter. looking ahead, we expect the economic recovery to proceed at a moderate but steady pace. domestic demand remains supported by the pass - through of our monetary policy measures to the real economy. favourable financing conditions and improvements in corporate profitability continue to promote investment. moreover, sustained employment gains, which are also benefiting from past structural reforms, and still relatively low oil prices provide additional support for households ’ real disposable income and private consumption. in addition, the fiscal stance in the euro area is slightly expansionary. however, the economic recovery in the euro area continues to be dampened by subdued growth prospects in emerging markets, the necessary balance sheet adjustments in a number of sectors and a sluggish pace of implementation of structural reforms. this outlook is broadly reflected in the june 2016 eurosystem staff macroeconomic projections for the euro area, which foresee annual real gdp increasing by 1. 6 % in 2016 and 1. 7 % in 2017 and 2018. compared with the march 2016 ecb staff macroeconomic bis central bankers ’ speeches projections, the outlook for real gdp growth has been revised up for 2016 and has remained broadly unchanged for 2017 and 2018. the risks to the euro area growth outlook remain tilted to the downside, but the balance of risks has improved on the back of the monetary policy measures taken and the stimulus still in the pipeline. downside risks continue to relate to developments in the global economy, to the upcoming british referendum and to other geopolitical risks. according to eurostat ’ s flash estimate, euro area annual hicp inflation in may 2016 was – 0. 1 %, up from – 0. 2 % in april, mainly reflecting higher energy and services price inflation. looking ahead, on the basis of current futures prices for oil, inflation rates are likely to remain very low or negative in the next few months before picking up in the second half of 2016, in large part owing to base effects in the annual rate of change of energy prices. supported by our monetary policy measures and the expected economic recovery, inflation rates should recover further in 2017 and 2018. this broad pattern is also reflected in the

mario draghi : ecb press conference – introductory statement introductory statement by mr mario draghi, president of the european central bank, and mr vitor constancio, vice - president of the european central bank, frankfurt am main, 2 june 2016. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. i would like to thank governor nowotny for his kind hospitality and express our special gratitude to his staff for the excellent organisation of today ’ s meeting of the governing council. we will now report on the outcome of our meeting. based on our regular economic and monetary analyses, we decided to keep the key ecb interest rates unchanged. we continue to expect them to remain at present or lower levels for an extended period of time, and well past the horizon of our net asset purchases. regarding non - standard monetary policy measures, we confirm that the monthly asset purchases of €80 billion are intended to run until the end of march 2017, or beyond, if necessary, and in any case until the governing council sees a sustained adjustment in the path of inflation consistent with its inflation aim. as a next step, on 8 june we will start making purchases under our corporate sector purchase programme ( cspp ). moreover, starting on 22 june, we will conduct the first operation in our new series of targeted longerterm refinancing operations. further information on implementation aspects of the cspp will be released after the press conference on the ecb ’ s website. the comprehensive package of decisions taken in early march underpins the momentum of the euro area ’ s economic recovery and fosters the return of inflation to levels below, but close to, 2 %. in particular, our measures continue to ease the cost of credit and contribute to a strengthening in credit creation. the economic recovery is gradually proceeding. additional stimulus, beyond the impetus already taken into account, is expected from the monetary policy measures still to be implemented and will contribute to further rebalancing the risks to the outlook for growth and inflation. in the current context, it is crucial to ensure that the very low inflation environment does not become entrenched in second - round effects on wage and price setting. the governing council will closely monitor the evolution of the outlook for price stability and, if warranted to achieve its objective, will act by using all the instruments available within its mandate. let me now explain our assessment in greater detail, starting with the economic analysis.