Draghi Says Inflation to Exceed 2% in 2012 as Economy Stalls

European Central Bank President Mario Draghi said inflation will probably breach the bank’s 2 percent limit this year and signaled the worst of the sovereign debt crisis may be over even as the economy stalls.

“Inflation rates are now likely to stay above 2 percent in 2012, with upside risks prevailing,” Draghi said in Frankfurt today after the ECB kept its benchmark interest rate at a record-low 1 percent. While risks to the economic outlook remain on the downside, “the risk environment has improved enormously,” he said. “We see many signs of returning confidence in the euro.”