INSUBCONTINENT EXCLUSIVE:
BENGALURU: Euro zone economic growth will be modest at best over the coming year, according to a Reuters poll of economists who unanimously
said the trade war between the United States and China threatens the outlook.
The euro sign in front of the former headquarters of the
European Central Bank (ECB) is photographed with long exposure in Frankfurt, Germany, November 20, 2017
REUTERS/Kai Pfaffenbach
After marking its fastest pace in a decade last year, economic growth in the currency bloc lost some momentum at the
It is forecast to remain steady at 0.4 per cent every quarter through to end-2019, according to the Sept
3-6 poll of more than 80 economists.
But even that expected modest pace was likely to be disrupted if a trade war between the United States
ongoing skirmishes on this front, a full-blown trade war initiated by the US but with matched retaliation by the EU, China and other
it will be forced to retaliate if the United States implements any new measures after President Donald Trump threatened new tariffs on
another $200 billion of Chinese imports.
US and European Union trade chiefs meet in Brussels next week to try and mend transatlantic ties
after Trump agreed to drop his threat of tariffs on EU cars.
While the consensus for full-year GDP growth was 2.1 per cent this year and 1.8
per cent next, unchanged from last month, on a quarterly basis the median for growth was 0.4 per cent every quarter until 2020, down from a
0.4-0.5 per cent range in August.
Economists were almost evenly split between being concerned and not worried about differing speeds of
growth and inflation in member countries within the currency bloc.
While 20 of 41 respondents said they were concerned, the remaining 21
cent target ceiling last quarter, primarily boosted by higher energy prices but was forecast to average 1.7 per cent for the next two years,
Economics.
Still, the latest poll showed the ECB will keep its refinancing rate at zero per cent and deposit rate at -0.40 per cent when
policymakers meet on Sept
13.
Thirty of 52 economists polled expect the central bank to have raised its refinancing rate by the end of next year, with the median of
those 30 at 0.25 per cent
The median of all 52 economists was 0.10 per cent, a response given by only five contributors.
The ECB is forecast to hike its deposit rate
by 15 basis points to negative 0.25 per cent in the third quarter of next year and take it to 0.25 per cent by end-2020.
