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ECB Monthly Report: Economic weakness in the euro area is expected to extend into 2013

FXstreet.com (Barcelona) - The January ECB Monthly Report recaps the information presented by Mario Draghi at the press conference following the central bank's latest monetary policy meeting, during which the governing council decided to maintain the main interest rate at 0.75%.

It states that inflation should decline below 2% during 2013 and that economic weakness in the Eurozone will extend into the new year but that it should give way to a recovery later in the year, as confidence in financial markets is improving gradually and bond yields are seen falling considerably. Credit conditions, already satisfactory, should continue improving as well, as the two long term refinancing operations helped stave off disorderly delevering.

A rapid implementation of structural reforms by Eurozone governments in order to increase competitiveness in the area is of crucial importance. This should boost growth potential and lead to a rise in employment. Emphasis was also put on the necessity of establishing an integrated financial framework in the Eurozone.

The January issue of the Monthly Bulletin is comprised of two articles: the first one “analyses the usefulness of survey-based confidence indicators for monitoring and predicting economic developments in the euro area”, while the second one “examines trends in intra-euro area trade over the last decade and looks at its role in the build-up and subsequent unwinding of current account imbalances in the euro area.”

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