April 9, 2018 / 5:02 PM / in 6 months

Euro zone inflation disconnected from growth: ECB's Praet

FRANKFURT (Reuters) - Euro zone inflation appears to have disconnected from growth and remains subdued even as the currency bloc’s economy expands rapidly, European Central Bank chief economist Peter Praet said.

FILE PHOTO - European Central Bank (ECB) executive board member Peter Praet speaks during an interview with Reuters in Frankfurt, Germany, March 14, 2018. Picture taken March 14, 2018. REUTERS/Ralph Orlowski

“However, the ongoing economic expansion is expected to further contribute to a narrowing of the output and unemployment gaps, whatever their current levels,” Praet told a business forum in Frankfurt.

“Once the Governing Council judges that the three criteria for sustained adjustment – convergence, confidence and resilience – have been met, net asset purchases will expire, in line with our guidance,” Praet said, repeating the ECB’s long-standing policy message.

Until then, an ample degree of monetary stimulus remains necessary for underlying inflation pressures to build up, Praet argued.

Reporting by Balazs Koranyi; editing by David Stamp

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