Thursday, the European Central Bank said in its monthly bulletin that the world economy, including the euro area, is undergoing a severe downturn.

The April bulletin was identical to the introductory statement given by the ECB President Jean-Claude Trichet on April 2, after announcing the Governing Council decision.

Both global and euro area demand are likely to remain very weak over 2009, before gradually recovering in the course of 2010, the bulletin said.

Available indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the Governing Council's aim of keeping inflation rates at levels below, but close to, 2% over the medium term.

A cross-check with the outcome of the monetary analysis confirms that inflationary pressure has been diminishing, the ECB said.

Regarding fiscal policies, the ECB said, it is necessary that countries' commitments to a path of consolidation in order to return to sound fiscal positions are credible, respecting fully the provisions of the Stability and Growth Pact.

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