ECB cuts 2014, 2015 economic growth forecasts
Mario Draghi - Photo ECB
(FRANKFURT) - The European Central Bank cut its forecasts for growth in the 18-country euro area this year and next, and also lowered its outlook for area-wide inflation, at a policy meeting on Thursday.
The ECB is pencilling in gross domestic product (GDP) growth of 0.9 percent in 2014 and 1.6 percent in 2015, the central bank's president Mario Draghi told a news conference.
"Compared with our projections in June, the projections for real GDP growth for 2014 and 2015 have been revised downwards," he said.
The bank said inflation was expected to be 0.6 percent this year -- a lower rate than the 0.7 originally forecast, Draghi said.
It maintained its forecasts for 2015 and 2016, at 1.1 percent and 1.4 percent respectively.
"The Governing Council, taking into account the measures decided today, will continue to closely monitor the risks to the outlook for price developments over the medium term," Draghi said.
"In this context, we will focus in particular on the possible repercussions of dampened growth dynamics, geopolitical developments, exchange rate developments and the pass-through of our monetary policy measures."
He said that the eurozone growth and inflation data from August indicated that the economic recovery was "losing momentum"
Growth remained flat in the second quarter and inflation slipped in August to 0.3 percent, feeding the threat of deflation and taking the eurozone farther from the ECB's target of close to but below 2.0 percent.