Significant monetary policy stimulus still needed, ECB's Praet says

The European Central Bank's chief economist continued to sound an upbeat note on the outlook for economy activity and inflation in the single currency bloc.

In remarks prepared for a speech in Frankfurt, Peter Praet said "significant" monetary policy stimulus was still needed to support the build-up of price pressures over the medium-term.

And despite some "loss of growth momentum", overall the economy continued to be supported by "favourable" financing conditions together with the "robust" jobs market and steady income and profit growth, he said.

Nevertheless, while one-off country-specific factors or sector-specific ones had impacted on growth recently, Praet added that "factors related to protectionism, financial market volatility and vulnerabilities in emerging markets are creating headwinds that are becoming increasingly noticeable."

On a more positive note, Praet hailed companies' shift away from bank-based sources of financing since 2014.

Praet also highlighted how the 'roll-over' of the ECB's portfolio, as the monetary authority reinvested the proceeds which it generated, would "continue to preserve abundant liquidity over the coming years".