ECB's Draghi raises inflation expectations for 2015

Compared with the ECB's estimates in March, the inflation projections have been revised upwards for 2015 from a flat reading and remain unchanged for 2016 and 2017, Draghi said at the ECB's press conference.

The ECB is hoping to bring inflation back towards its target of just below 2% through its policy measures, including low interest rates and the quantitative easing (QE) programme, together with governments' structural reforms.

Draghi said inflation is expected to remain low in coming months before beginning to rise on the back of growth in domestic demand and private consumption. Low oil prices should support households' disposable incomes and therefore private consumption, he said.

Inflation rose 0.3% year-on-year in May, compared to 0% a month earlier, according to a preliminary estimate from Eurostat on Tuesday. While analysts had been expecting 0.2% growth last month, Draghi said it was in line with the ECB's projections.

On economic growth in the Eurozone, the central bank sees real gross domestic product rising 1.5% in 2015, unchanged from March's projections. The ECB expects GDP to rise 1.9% in 2016 and 2.0% in 2017.

Meanwhile, Draghi soothed concerns about an early end-date to QE. He insisted that the QE programme, introduced in March, would not end until the ECB has reached its inflation target. The ECB expects QE to continue until September 2016.

His remarks came after the ECB decided to keep policy unchanged, as expected, with interest rates at 0.5%, the deposit facility at -0.20% and the marginal lending facility at 0.30%.