New monetary stimulus from the European Central Bank (ECB) will do 'little' to boost the region's sluggish economy and tackle its biggest risks, analysts told CNBC.
New monetary stimulus from the European Central Bank will do"little" to boost the region's sluggish economy and tackle its biggest risks, analysts told CNBC.
The Frankfurt-based institution surprised markets with a renewed dovish tone. ECB President Mario Draghi said that interest rates would remain at record lows at least until December. Growth forecasts for the euro zone were slashed for this year and new loans to euro zone banks were announced. Draghi even acknowledged this fact in a press conference following the ECB's formal rate decision on Thursday."We are aware that our decisions certainly increase the resilience of the euro zone economy, but actually can they address these factors that are weighing on the euro zone economy in the rest of the world? They cannot," Draghi told reporters, adding that protectionism and geopolitics were among those outside risks.
"With few domestic catalysts for a turnaround, it may take a rebound in demand from the emerging world to improve prospects for the region," Tilmann Galler, a global market strategist at J.P. Morgan Asset Management, said in a note Tuesday.
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