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ECB's QE unlikely to prompt a meaningful economic recovery in EZ: Capital Economics

Quotes from Capital Economics:

- While ECB President Mario Draghi struck a cautiously optimistic tone today, we doubt that the Bank's quantitative easing programme will prompt a meaningful economic recovery or eradicate the threat of deflation.

- Draghi saw "absolutely no reason" to deviate from the plan to purchase €60bn of public and private sector assets per month between now and September 2016. The policy - together with falls in the oil price and the euro exchange rate - was deemed a key reason for the improvement in the economic outlook. Nonetheless, he left open the option of buying more assets from late 2016.

- But while the new details sound fairly encouraging, we doubt that the policy will be as effective as the Bank hopes. Accordingly, we still see euro-zone GDP rising by just 1.0% this year and next and envisage a significant risk of a sustained bout of deflation. 

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