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ECB worsens eurozone growth expectations

US, WASHINGTON (NEWS OBSERVATORY) — The European Central Bank on Thursday lowered its forecasts for the growth of the eurozone economy for the current and next years, but said that new estimates made before the outbreak of coronavirus in Europe are likely to be outdated.

According to the latest forecast, the ECB expects euro zone GDP to grow by 0.8% in 2020, by 1.3% in 2021 and by 1.4% in 2022. The December forecast provided for an increase of 1.1% in 2020 and 1.4% in 2021 and 2022.

ECB Chairman Christine Lagarde said the risks for the forecasts are “obviously downward” and that the coronavirus epidemic has added negative factors.

“Eurozone growth is expected to increase momentum again in the medium term,” Lagarde said during a press conference after the Central Bank left key interest rates unchanged.

The ECB kept inflation forecasts for the current and next two years at 1.1%, 1.4% and 1.6%, respectively.

Typically, ECB economic forecasts are compiled three weeks before they are published. The central bank updates forecasts quarterly.

Below are the new ECB staff forecasts for inflation and GDP growth in percent, December forecasts are given in parentheses.

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.