ECB to underline bright outlook for eurozone

FRANKFURT AM MAIN, Mar 6 (AFP): The European Central Bank (ECB) could signal greater optimism for the eurozone at a meeting Thursday, but will remain tight-lipped about plans for winding down its massive support to the economy, analysts predict.

With a transatlantic trade war looming and a populist surge in Italy's Sunday elections that shadowed the major eurozone economy with uncertainty, ECB President Mario Draghi is unlikely to rock the boat with talk of higher interest rates or cuts to its "quantitative easing" bond-buying programmeme.

Observers see the ECB on the way out of its mass bond-buying scheme, after it decided to halve purchases of government and corporate debt to some 30 billion euros ($37 billion) per month from January this year.

Combined with historic low interest rates, bond-buying was designed to stoke economic growth in the eurozone by pumping cash through the financial system, helping boost inflation to the ECB's target of just below 2.0 per cent -- seen as most favourable for long-term growth.

But while GDP expansion in the 19-nation single currency area surged to 2.5 per cent last year, price growth has not picked up in step.

In December, ECB forecasts called for inflation to hit 1.7 per cent by 2020 -- still slightly short of its goal. Indicators like business confidence, unemployment and credit growth "have been consistent with the ECB's positive assessment" for future expansion of 2.3 per cent this year and 1.9 per cent in 2019, economist Frederik Ducrozet of Pictet bank noted.