BRUSSELS (REUTERS) - The European Central Bank needs more time to assess whether to beef up its asset-buying programme, ECB President Mario Draghi said on Wednesday, confounding some expectations that an expansion of quantitative easing may be imminent.
Slowing emerging market growth, a stronger euro and the fall in commodity prices dampen the outlook, but more evidence was needed to determine if these factors would have a lasting impact, Mr Draghi told the European Parliament's Committee on Economic and Monetary Affairs.
"More time is needed to determine in particular whether the loss of growth momentum in emerging markets is of a temporary or permanent nature and to assess the driving forces behind the drop in the international price of commodities and behind the recent episodes of severe financial turbulence," Mr Draghi said. "We will therefore monitor closely all relevant incoming information and its impact on the outlook for price stability, he added."
Mr Draghi's comments come after the U.S. Federal Reserve left rates on hold last week, highlighting a growing risk to global growth from China's economic slowdown.
Indeed, activity in China's factory sector unexpectedly shrank to a 6-1/2 year low in September, PMI data showed on Wednesday, raising fears of a sharper slowdown in the world's second-largest economy that could spell more turmoil for financial markets.
Still, Europe appears relatively resilient with September PMI data showing only a small drop from relatively high levels, indicating that emerging market weakness is not derailing the euro zone's slow but steady recovery.