European Economy Is Getting “Worse And Worse”

As results of the meeting last week European data has shown the economy is getting worse.

Mario Draghi didn’t pull his punches when he said the economic outlook is getting “worse and worse.”

Growth probably slowed to 0.2% in the second quarter, a below-trend pace that will do little to help the European Central Bank president’s effort to push inflation higher. Business surveys across the region will provide a detailed look at how companies are coping with trade tensions and weaker demand, and may put to rest any hopes for a better performance this quarter.

There may also be disappointing news on inflation this week, with both the headline and core rates down near 1%. A survey last Friday showed longer-term inflation expectations are falling, and it’s pretty clear what Draghi thinks about that. “We don’t like what we see on the inflation front,” he said last week.

Draghi has given staff at the ECB and national central banks a mission before the next meeting to examine what policy makers can do to help the economy. More interest rate cuts and a new round of bond purchases are on that list, despite some doubts about how much room there’s left for both tools.

 

 

 

Source: Bloomberg

 

 

 

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by
July 29, 2019
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