There is unlikely to be much change in euro zone economic growth in 2016. Non-performing loans on bank balance sheets, overly high corporate and private debt, falling house prices in Italy and France and the lack of substantial economic reforms in Italy all point to continued moderate growth. The projection for growth of 1.3% in 2016 is lower than most economists (1.7%) and the still double-digit unemployment rate should therefore fall only slowly. Consequently, core inflation (ex. energy, food, alcohol and tobacco) is more likely to stick at 1% next year rather than rise to just below 2%, as the ECB aims for. This is also supported by the fact that the huge fall in the oil price is also gradually lowering the prices of non-energy goods, which is largely neutralising the inflation-driving effect of past euro depreciation. 

Against the backdrop of the overall economic picture, the ECB growth and inflation forecasts published on Thursday are likely to be too high. The ECB is expected to loosen its monetary policy again in 2016, although the economic data will not be so poor that Draghi has enough support for a radical step (an increase in monthly asset purchase volume). In addition, the ECB could again push the earliest date for an end to asset purchases beyond the current date of March 2017.

"We envisage a further reduction of the deposit rate by 0.1 percentage points to -0.4%, possibly at the March meeting", says commerzbank.