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ECB slashes inflation forecasts, sees lower growth
[FRANKFURT] The European Central Bank slashed its inflation forecasts on Thursday and predicted that price growth will remain below its target even in 2018 as it struggles with cheap energy feeding into the price of other goods and services.
The ECB cut its 2016 inflation projection to 0.1 per cent from 1.0 per cent and lowered the 2017 forecast to 1.3 per cent from 1.6 per cent, ECB President Mario Draghi said as he presented quarterly staff forecasts.
Making its initial 2018 projection, the ECB predicted an inflation rate of 1.6 per cent, also short of its target of almost 2 per cent. Inflation has undershot the target for three years and the forecasts suggest it will fall short for at least three more years.
The bank made more modest adjustments to its GDP growth projections after the eurozone economy slightly outputformed its expectations last year and recent data indicated that consumption is holding up well.