ECB keeps interest rates unchanged at 0.25%

The European Central Bank (ECB) on Thursday decided to keep interest rates unchanged at 0.25 percent at a regular rate-setting meeting here. The interest rates on the main refinancing operations in May, the marginal lending facility and the deposit facility will remain unchanged at 0.25 percent, 0.75 percent and 0.00 percent respectively, according to a statement released by the ECB. Eurozone annual inflation is expected to be 0.7 percent in April 2014, up from 0.5 percent in March, according to a flash estimate from Eurostat, the statistical office of the European Union earlier. "Annual HICP [Harmonized Indices of Consumer Prices] inflation is expected to remain around present low levels over the coming months," ECB president Mario Draghi said following the meeting, predicting the HICP inflation rate would "only gradually increase during 2015 to reach levels closer to 2 percent towards the end of 2016." "New macroeconomic projections by Eurosystem staff will become available in early June," he added. Real GDP in the euro area rose by 0.2 percent in the last quarter of 2013, having increased for three consecutive quarters. "Recent data and survey indicators confirm that the ongoing moderate recovery continued in the first quarter of 2014 and at the beginning of the second quarter," Draghi said. Though the risks surrounding the economic outlook for the euro area continue to be on the downside, Draghi said "geopolitical risks, as well as developments in global financial markets and emerging market economies, may have the potential to affect economic conditions negatively." "Other downside risks include weaker-than-expected domestic demand and insufficient implementation of structural reforms in euro area countries, as well as weaker export growth," he added.