ECB improves forecast for eurozone economy this year

Mario Draghi ECB president Mario Draghi is "very, very cautious" about the recovery

Related Stories

The European Central Bank (ECB) has improved its outlook for the eurozone economy this year.

It now expects the single-currency area to shrink 0.4% compared to its previous forecast in June of a 0.6% contraction.

The ECB on Thursday held interest rates at 0.5% despite tentative signs that the eurozone is recovering.

The 18-nation bloc emerged from recession in the second quarter of this year, with growth of 0.3% recorded between April and June.


ECB president Mario Draghi said: "I am very, very cautious about the recovery. I can't share enthusiasm. It is just the beginning. Let's see, these shoots are still very, very green."

The euro fell to a six-week low against the US dollar after Mr Draghi's comments.

Explaining the drop, Adam Cole, head of currency strategy at RBC Capital Markets, said: "He didn't pay any lip service to the better data that we've had in recent weeks. He also reiterated the forward guidance from a month ago."

In July, Mr Draghi said interest rates are likely to remain low for an "extended period".

It was the first time the central bank issued so-called forward guidance on interest rates, but the bank has not given any indication on how long an "extended period" might be.

That will in part depend on how European economies fare over the coming months.

In the second quarter of the year, Germany and France saw stronger-than-expected growth of 0.7% and 0.5%, respectively.

But weaker economies, including Spain, Italy, and the Netherlands, all saw output fall.

The ECB expects the recovery to be gradual over the rest of the year, and strengthen in 2014.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories


Features & Analysis

  • Signposts showing the US and UK flagsAn ocean apart

    How British misunderstanding of the US is growing

  • Before and after shotsPerfect body

    Just how reliable are 'before and after' photos?

  • Mukesh SinghNo remorse

    Delhi bus rapist says victim shouldn't have fought back

  • A cow wearing sunglasses overlaid with the phrase 'Can't touch this'Cow row

    Thousands rally against the ban on beef in India

From BBC Capital


  • Former al-Qaeda double agent Aimen DeanHARDtalk Watch

    Islamic State is about revenge says former al-Qaeda member turned spy Aimen Dean

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.