ECB to cut Eurozone growth forecast on global demand

ECB to cut Eurozone growth forecast on global demand

Mubasher: The European Central Bank (ECB) is expected to slightly change its projections for the Eurozone economic growth, with global trade rows throwing a wrench into external demand, according to officials.

The estimates for output have been tweaked starting this year, Bloomberg News reported on Wednesday citing officials familiar with the figures.

The UK and Turkey were among the nations that would damp demand, but the outlook remained positive as far as the US was concerned, the officials said.

The outlook for inflation and primary consideration for the monetary policy was unchanged to some extent, the officials noted.

In June, the ECB projected that economic growth would lose momentum from 2.1% to 1.7% in 2020, while inflation was expected to average 1.7% in the three years included in the projections.

The dimmer outlook came at the time when the Governing Council prepared to wind back stimulus.

President Mario Draghi, who would announce the final projections after the Governing Council meeting, pointed to the impact of recent protectionist threats and global uncertainties on confidence.

Turkey and Argentina have stumbled into crises, resulting in turbulence across emerging markets, while the UK faces a risk of leaving the European Union (EU) without a trade agreement with the bloc.

The reduction of monthly bond purchases are expected to be confirmed at EUR 15 billion ($17 billion) from EUR 30 billion as from the coming month and they would end in December, according to analysts polled by Bloomberg last week.

Following the news, the euro (EUR) dipped to $1.1589 at 10:00 am GMT.

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Source: Mubasher