VILNIUS (Reuters) - The European Central Bank sees slightly higher growth and inflation in 2019 than previously, but marginally cut its forecasts for the next two years on Thursday, acknowledging the risk that Europe’s slowdown will be longer and deeper than expected.
ECB President Mario Draghi told a news conference that risks to the euro area economy remain tilted to the downside, citing geopolitical uncertainty, the rising threat of protectionism and vulnerabilities in emerging markets.
With a global trade war weighing on confidence, industrial production and exports have taken a dip, exacerbated by a string of domestic difficulties, from German industry’s struggles to Italy’s looming budget fight with the European Commission.
But solid wage growth, record-high employment and healthy first quarter growth figures suggest the economy is still resilient, reinforcing the ECB’s expectations that the recovery is delayed, not derailed.
The following are the ECB staff’s new projections for inflation and GDP growth, with March forecasts in brackets.
The ECB updates projections once a quarter.
Reporting by Balazs Koranyi; writing by Catherine Evans; editing by John Stonestreet