European Central Bank (ECB) staff revised down on Thursday their forecast for growth of gross domestic product in the eurozone during 2019 to 1.1 percent.
The new figure is considerably down from the previous estimate of 1.7 percent. The central bank also now forecasts GDP growth for the year 2020 in the area to be 1.6 percent, compared with its previous forecast of 1.7 percent. The outlook for the year for they year 2021 remains unchanged at 1.5 percent.
The European Central Bank also cut its inflation forecast for 2019 to 1.2 percent, down from 1.6 percent. The inflation rate for 2020 was cut to 1.5 percent, compared to the previous forecast of 1.7 percent. As for 2021, inflation was revised down to 1.6 percent from 1.8 percent.
The cuts come following continued weakness across the board in European economic data. The development prompted the ECB earlier today to say it will hold off any rate hikes until at least the end of this year, compared the previous promise to stay on hold only through the summer. The ECB also launched a new program of targeted long-term loans to eurozone banks. In his news conference, ECB Central Bank President Mario Draghi said risks to the eurozone outlook remain tilted to the downside. (QNA)