MOSCOW, December 12. /TASS/. The Governing Council of the European Central Bank (ECB) decided to lower three key interest rates. According to the statement released after the meeting of the Governing Council of the regulator, the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 3%, 3.15%, and 3.4%, respectively.
"The Governing Council today decided to lower the three key ECB interest rates by 25 basis points. In particular, the decision to lower the deposit facility rate - the rate through which the Governing Council steers the monetary policy stance - is based on its updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission," the regulator said.
Inflation is forecast to average 2.4% in 2024, 2.1% in 2025, 1.9% in 2026, and 2.1% in 2027, when the EU's expanded emissions trading scheme comes into effect. Inflation excluding energy and food prices is expected to average 2.9% in 2024, 2.3% in 2025, and 1.9% in 2026 and 2027.
At the same time, the European Central Bank expects the economic recovery to be slower than it predicted in September. "Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter. Staff see the economy growing by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026, and 1.3% in 2027. The projected recovery rests mainly on rising real incomes - which should allow households to consume more - and firms increasing investment. Over time, the gradually fading effects of restrictive monetary policy should support a pick-up in domestic demand," the statement said.
The eurozone economy is forecast to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026, and 1.3% in 2027. The projected economic recovery depends mainly on real income growth, which will allow households to consume more and businesses to increase investment.