Economists have lowered their forecast for eurozone economic growth in 2569 to 0.5% from the previous 0.7% following renewed conflict in the Middle East. Meanwhile, the market anticipates the ECB will raise interest rates again in September.
On July 13, 2569 at 13.30:XNUMX p.m., Bloomberg News reported that A Bloomberg survey of economists conducted between July 3-8. Found that Analysts have lowered their forecast for eurozone economic growth in 2569 to 0.5% from 0.7% estimated last month, and below the European Central Bank's (ECB) baseline estimate of 0.8%.
The downward revision of forecasts comes after the conflict in the Middle East flared up again, with U.S. President Donald Trump announcing on Friday that the ceasefire with Iran had ended, although he stated that peace negotiations were continuing.
Meanwhile, fighting that has impacted shipping through the Strait of Hormuz, a vital global oil shipping route, has dampened hopes of economists and ECB officials who expected energy supplies to return to normal.
Giannis Stournaras, a member of the ECB's policy-making body. said The resurgence of conflicting views has forced the European Central Bank to start over in assessing economic and inflation trends.
In addition to lowering its 2569 forecast, economists have also revised downward its economic growth forecast for 2571, while the estimate for 2570 remains unchanged.
On the inflation side, analysts expect the average inflation rate in the eurozone this year to be 2.8%, a slight decrease from previous estimates. Following a recent sharp decline in oil prices, although prices have begun to recover, they remain above the ECB's inflation target of 2%.
Regarding monetary policy direction, most economists expect the ECB to raise its policy interest rate again in September, following the 0.25% increase in June. Before the first interest rate cut in September 2570, if inflationary pressures begin to ease.
refer : www.bloomberg.com
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