European Central Bank President Mario Draghi warned on Monday that it isn’t yet time to withdraw the ECB’s stimulus measures, even as he pointed to signs of strength in the eurozone’s EUR10 trillion economy.

The comments, at a hearing before European lawmakers in Brussels, come amid a groundswell of criticism of the ECB in Germany, where a jump in inflation has sparked fresh calls for the end of ECB easy money.

Speaking at the European Parliament, Mr. Draghi acknowledged that the region’s economy is steadily improving, with unemployment rates falling and inflation set to pick up over the coming years. He said that “acute deflation risks have disappeared.”

But the ECB chief warned that policy makers shouldn’t react to “individual data points and short-lived increases in inflation.” The recent jump in eurozone inflation, to 1.8% last month, was driven largely by higher energy prices.

“Support from our monetary policy measures is still needed,” Mr. Draghi said.

The ECB’s governing council decided in December to extend its EUR2.3 trillion ($2.48 trillion) bond-purchase program through the end of this year, although the purchases will slow to EUR60 billion a month from EUR80 billion after March. That move was opposed by Germany’s Bundesbank.

Mr. Draghi said the decision struck a balance “between our growing confidence that the euro area’s economic prospects are firming up, and–at the same time–the lack of a clear sign of sustained convergence of inflation rates toward the desired level.”

After Mr. Draghi’s comments, the euro fell to its lowest point against the dollar in nearly a week.

Source: Dow Jones