-ECB President Mario Draghi
The 17-nation economy is expected to start gaining pace later this year, even despite challenging outlook, the ECB President Mario Draghi said on Monday. During the last month's policy meeting the ECB has cut its benchmark interest rate to a record low of 0.5%, and signalled that another rate cut can be expected in case of further deterioration of the economy. Even though the economy contracted in the first quarter of this year and the unemployment rate soared to a fresh high in April, most economists do not expect the ECB to lower borrowing costs when it meets on June 6.
Draghi also has defended its bond-buying programme, considering it as an effective instrument. Last year's announcement helped to lower borrowing costs for debt-burdened Eurozone countries such as Spain and Italy. Despite some positive effect, German central bank expressed its concerns about this programme, and a court hearing against it is scheduled later this month.
The Organisation for Economic Cooperation and Development said that it expects the Eurozone economy to remain in recession for a second year in a row, with its economic output seen shrinking 0.6% in 2013 and returning to growth only next year with a rate of 1.1%.
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