In the Monthly Bulletin released today, ECB warned that “signs of moderating momentum are emerging” in the global economy. And “activity is expected to decelerate in 2019 and remain steady thereafter.” And that “reflects the projected cyclical slowdown across advanced economies and in China.”
The central bank also noted that “The intensification of trade tensions between the United States and China should weigh on activity in both countries. While the global impact is still judged to be relatively limited, heightened uncertainty about future trade relations may adversely affect confidence and investment.”
ECB added that “While the temporary truce between the United States and China sent a positive signal, there remains considerable uncertainty as to whether the talks will lead to a significant de-escalation of US-China trade tensions.”
For Eurozone economy, ECB noted the slowdown in 2018 has been “driven largely by external factors, in particular the weakness in external demand.” And, “much like the strengthening of growth in 2017, the slowdown in 2018 has been driven by net exports. Trade dynamics have been normalising as global growth has fallen back towards potential levels.
Nevertheless, ECB also said “All in all, the recent slowdown in growth has not, thus far, called into question the fundamentals of the current economic expansion.”
