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First Posted: 11/21/2013 (AP) The head of the European Central Bank says harmful deflation is not taking hold in the eurozone despite concerns over the strength of the region's recovery.
Mario Draghi said Thursday in a speech in Berlin that the ECB's decision to cut interest rates was "not because we see deflation risks materializing."
Draghi said inflation will gradually return to the ECB's goal of just under 2 percent annually as the economic recovery gathers pace.
Low inflation of only 0.7 percent in October raised concerns the 17-country euro currency union could suffer deflation, a chronic downward price spiral that hurts the economy.
The ECB cut its benchmark interest rate to a record low 0.25 percent Nov. 7 to try to stimulate the economy and said it could take further measures if needed.
<a title="Associated Press" href="http://www.ap.org" class="url org fn">Associated Press</a>

Draghi: ECB does not see deflation