ECB: Prolonged Uncertainty Dampens Eurozone Outlook

Added On August 10, 2019

The European Central Bank (ECB) has said softening global growth and international trade are still weighing on the eurozone outlook, and the prolonged presence of uncertainties is dampening economic sentiment.
In its latest issue of Economic Bulletin,  the ECB pointed out factors that are driving economic sentiment lower, especially in the manufacturing sector.
These factors include the prolonged presence of uncertainties related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets.
The ECB reiterated its concern about the area's inflation, which still falls short of its aim.
It noted that "a significant degree of monetary stimulus continues to be necessary" to ensure favorable financial conditions and headline inflation developments over the medium term. 
The bank kept key interest rates unchanged but revised forward guidance to open doors for possible monetary policy easing.
The euro area real GDP increased by 0.4 percent quarter-on-quarter in the first three months of this year.
However, incoming economic data and survey information suggest somewhat slower growth in the second and third quarters.
Still, the bank noted that activity in the services and construction sectors is resilient and the labor market continues to improve.