The European Central Bank is all but certain to keep policy unchanged on Thursday but may acknowledge a sharp slowdown in growth, raising the prospect that any further policy normalization could be delayed, ABS-CBN News reported.
The ECB last month ended a landmark 2.6 trillion euro ($2.96 trillion) bond purchase scheme and maintained its guidance that an interest rate hike is likely late this year.
But growth appears weaker than thought just a few weeks ago, suggesting that its next move could even be an easing of policy rather than a tightening.
Germany, France and Italy, the euro zone's biggest economies, barely grew in the fourth quarter and ECB President Mario Draghi has already acknowledged that the slowdown could be longer than expected, setting up the ECB for a dovish meeting.
With much of its firepower depleted, Draghi will use his few remaining tools sparingly, suggesting Thursday's meeting will be more about words than action.
At most, Draghi could downgrade the bank's economic assessment, arguing that growth risks are now tilted to the downside. He could also provide clues about new loans to banks, called Long-Term Refinancing Operations or LTROs, likely to come in the spring.
