ECB 's Draghi expects only slight slowdown in euro area growth

European Central Bank chief Mario Draghi believes that the headwinds buffeting the single currency bloc are only partly transitory, although he expects the Eurozone economy to continue growing at a steady clip.

In the introductory statement prepared for his testimony before the economic committee of the European Parliament, the ECB's boss said a "gradual" slowdown in growth as the euro area economy converged towards its so-called potential pace, amid labour shortages and as savings rates returned to normal, was to be expected.

So too "as world trade stabilises" the drag on growth may also be temporary, he said.

However, echoing remarks from his chief economist, Peter Praet, earlier in the day, Draghi added that: "risks relating to protectionism, vulnerabilities in emerging markets and financial market volatility remain prominent."

On the subject of prices, the central banker said that "there is good reason to be confident that underlying inflation will gradually rise in the period ahead."

To support his prognosis, he pointed to faster wage growth and higher producer and import prices.

In addition, he said, long-term and suvey-based measures of inflation expectations were reasonanly "well anchored".

Significantly, Draghi also voiced his support for a proposed European Investment Stabilisation Function in order to help the Eurozone maintain convergence when faced with exogenous shocks.

Also echoing Praet, Draghi said that: "At the same time, prevailing uncertainties still call for patience, prudence and persistence in calibrating our monetary policy stance.

"Significant monetary policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term."