LONDON (Reuters) - Bank of America Merrill Lynch cut its forecast for euro area growth in 2019 to 1.1 percent from 1.4 percent on Friday, saying uncertainty over trade policy and weak Chinese data were taking their toll on economies in the bloc.
“The euro area is facing a triple whammy of FX appreciation, foreign demand weakness (read: China) and trade policy uncertainty,” economists at the U.S. bank wrote in a note, saying their growth forecast was now below market consensus.
Trade policy uncertainty is already impacting euro zone growth by -15 basis points, they estimated. U.S. tariffs on EU car imports could cost an additional 30 basis points of growth deterioration.
Last week BAML cut its inflation forecast for the bloc to 1 percent due to a fall in oil prices.
Reporting by Helen Reid, Editing by Marc Jones