On Thursday, the European Central Bank kept interest rates at 4% for the second meeting in a row, while reviewing its growth expectations downward.
The ECB was widely expected to hold interest rates in light of the sharp decline in inflation in the euro zone, while investors look at the timing of the first rate cut and evaluate the European Marquess's plan to shrink the balance sheet.
The European Central Bank said in its statement that the bank's future decisions will confirm that interest rates will remain at restrictive levels as long as necessary.
The central bank's latest forecast included an expansion of real GDP by 0.6% on average during 2023, from the previous forecast of 0.7%. The Central Bank also expects GDP to grow by 0.8% in 2024 from 1% previously. The bank's expectations for 2025 have not changed, remaining at 1.5%.
While the European Central Bank expects general inflation to reach an average of 5.4% in 2023, 2.7% in 2024, and 2.1% in 2025. It had previously expected it to reach 5.6% this year, 3.2% in 2024, and 2.1% in 2025. The European Union also issued new estimates for 2026 at 1.9%.
