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6/6, 2:46 PM (Source: TeleTrader)
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ECB lowers 2020, 2021 growth outlook

Global headwinds to the economy of the Eurozone are dominated by prolonged uncertainties, geopolitical and threats from protectionism as well as vulnerabilities in emerging markets, Mario Draghi said on Thursday. The president of the European Central Bank, who has less than five months before the end of his term, said domestic manufacturing is particularly impacted, against resilience in services.

The quarterly forecast for real growth in gross domestic product was improved from the March update by 0.1 percentage points for this year to 1.2%, trimmed by 0.2 points to 1.4% for 2021 and decreased to 1.4% from 1.5% for the year after that. The perceived inflation rates were revised by 0.1 points higher to 1.2%, cut by 0.1 points to 1.4% and held at 1.6%, respectively, attributing the changes mostly to oil prices.

"The positive contribution of negative interest rates to the accommodative monetary policy stance and to the sustained convergence of inflation is not undermined by possible side effects on bank-based intermediation. We will continue to monitor though," the top rate-setter said after a dovish monetary policy decision. He said employment and wage gains underpin the economy.

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