Riga, June 14, 2018 (AFP)
The European Central Bank on Thursday slashed its 2018 eurozone growth forecast to 2.1 from 2.4 percent, blaming the threats of rising protectionism and global trade tensions for clouding the outlook.
"Uncertainties related to global factors, including the threat of increased protectionism, have become more prominent, the risk of persistent, heightened financial market volatility warrants monitoring," ECB chief Mario Draghi told reporters in Riga.
The more downbeat assessment comes after the euro area got off to a shaky start in 2018 with growth slowing to 0.4 percent in the first quarter, compared with 0.7 percent in the previous three months.
Markets have been rattled in recent weeks by a mounting trade dispute with the United States, which has raised the prospect of a tit-for-trade transatlantic trade war, while the spending plans of Italy's new populist government have revived concerns over the country's huge debt pile.
Despite the "increasing uncertainties", Draghi said the bank's governing council remained confident in "the underlying strength of the euro area economy" -- allowing it to begin phasing out its crisis-era stimulus measures.
The bank left its growth forecasts for 2019 and 2020 unchanged compared with the last estimates released in March, at 1.9 and 1.7 percent respectively.
Turning to inflation, Draghi said the bank's governing council was convinced that price growth was on track towards the bank's target of just under 2.0 inflation.
The bank raised its inflation forecasts for 2018 and 2019 to 1.7 from 1.4 percent, which Draghi said was mainly down to "higher oil prices".
For 2020, the inflation outlook remained unchanged at 1.7 percent.

Sumber : AFP