The ECB keeps interest rates at 4.5% and revises downward inflation forecasts for the eurozone

The European Central Bank (ECB) has issued a statement following its meeting in Frankfurt in which it has decided to keep interest rates at 4.5%, a level that has been maintained since 2001. This measure, which was expected by financial analysts, marks the fourth consecutive time that the ECB has chosen not to make changes to interest rates. Furthermore, the ECB has revised downwards its inflation forecasts for the eurozone, estimating that it will reach the 2% target only in 2025. It has also been forecasted that economic growth in the region will be 0.6% in 2024, increasing to 1.5% in 2025 and 1.6% in 2026. The institution has emphasized that keeping interest rates at current levels for an extended period will significantly contribute to achieving its goal of stable medium-term inflation. Future decisions of the ECB will be based on the assessment of inflation prospects, the dynamics of underlying inflation, and the transmission of monetary policy to the overall economy. It is important to note that this decision comes at a time when inflation in the eurozone has experienced a slight decrease, standing at 2.6% in February. On the other hand, the Gross Domestic Product (GDP) of the euro area remained stagnant in the last quarter of 2023, thus avoiding a technical recession. It should be remembered that interest rates in the eurozone have undergone a cycle of continuous increases from July 2022 to September 2023, at which point the ECB decided to keep them at 4.5%, a level that has been maintained since then. This decision by the ECB is crucial for the European economy, and it will be essential to closely monitor how inflation rates and economic growth evolve in the coming months to assess possible changes in monetary policy in the region.