The European Central Bank will end its asset purchases by year-end as scheduled, according to a Reuters poll of economists who said the risk bond-buying will continue into next year was low, even with growth likely to slow and inflation stay tame. After outpacing major peers over the past two years, the euro zone economy has lost some momentum from last year’s decade high and the latest poll of over 90 economists taken June 19-22 showed a slight cut to growth forecasts for this year. Nevertheless, all 58 economists who answered an additional question said the risk the ECB will have to extend its quantitative easing program (QE) into next year was “low”, including over 60 percent who said “very low”.
The currency bloc’s economy is now forecast to expand at 2.2 percent this year, a slight downgrade from 2.3 percent in the same poll last month. Forecasts remained unchanged at 1.9 percent for 2019. The biggest risk to the economy was a rise in protectionism, as trade spats between the United States and major trading partners continue, political turmoil in Italy and Britain’s fraught divorce proceedings with the European Union.
Source: Reuters.com