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Draghi Keeps Gradual Recovery Faith as ECB Cuts Forecasts

European Central Bank President Mario Draghi stuck to his view that the euro region will gradually recover later this year even as officials trimmed their economic forecasts and considered cutting interest rates. “Later in 2013 economic activity should gradually recover, supported by a strengthening global backdrop and our accommodative monetary policy stance,” Draghi told a press conference in Frankfurt after the ECB left its benchmark interest rate at 0.75 percent, a record low. While officials discussed cutting borrowing costs today, the “prevailing consensus was to leave the rates unchanged,” Draghi said. Uncertainty caused by the stalemate in last month’s Italian election, where anti-austerity parties won more than half the vote, has renewed concern that the euro area may struggle to overcome the sovereign debt crisis and exit recession. The ECB today predicted the 17-nation economy will shrink 0.5 percent this year, more than the 0.3 percent contraction forecast three mont

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