MNI: ECB Draghi: Progress on Infla Still "Incomplete, Partial"

By Christian Vits

     FRANKFURT (MNI) - European Central Bank President Mario Draghi Friday

applauded the economic recovery in the euro area but reiterated that inflation

still needed to rise in a more self-sustained way.

     "The euro area is in the midst of a solid economic expansion," Draghi said

at the European Banking Congress in Frankfurt. "Despite this progress on the

real side of the economy, from a monetary policy perspective our task is not

complete, as we have not yet seen a sustained adjustment in the path of

inflation," he added.

     "In sum, we are not yet at a point where the recovery of inflation can be

self-sustained without our accommodative policy," Draghi said.

     A sustained adjustment would be one where the return of inflation rates

towards the ECB's target of below but close to 2 percent is durable and not just

a temporary blip, and when it can be self-sustained without monetary policy

support, he stressed.

     "We do now see inflation moving steadily away from the very low levels of

recent years, although progress remains incomplete and partial," Draghi noted.

--MNI Frankfurt Bureau; +49 69 97782671; email: christian.vits@marketnews.com

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