In the Monthly Economic Bulletin, ECB noted again that growth risks surrounding growth outlook have “moved to the downside” on “persistence of uncertainties related to geopolitical factors and the threat of protectionism, vulnerabilities in emerging markets and financial market volatility.” And, “ample degree of monetary accommodation” is still needed for the block.
In particular, ECB said downside risks to global activity have been increasing, and warned “further escalation of trade disputes could weigh on global growth.” It acknowledged that postponement of US-China tariffs has “sent a positive signal”. But “considerable uncertainty” remains to whether negotiations could lead to de-escalation.
For Eurozone, ECB said “incoming information has surprised to the downside”. Also, growth in Eurozone foreign trade “appears set to decline further in the fourth quarter of 2018”. And it described that “pace of euro area export growth slowed down substantially (to 0.1%) in the third quarter, whereas growth in imports eased (to 1.0%).”. Net trade “exerted a drag on economic activity with a large negative contribution to GDP growth”
