Professional forecasters surveyed by the European Central Bank on Thursday lowered their predictions for Eurozone's gross domestic product and inflation.
The Quarterly Survey of Professional Forecasters, or SPF, was released by the central bank in its monthly bulletin.
The forecasters now expect inflation in the region to be 1.7 percent this year, a tad below 1.8 percent projected in the first quarter. The outlook for 2014 was revised down to 1.6 percent from previous expectation of 1.8 percent. The inflation outlook for 2015 was cut to 1.8 percent from 1.9 percent.
They expect the euro area economy to contract 0.4 percent in 2013, compared with the stagnation projected three months ago. In 2014, the gross domestic product is seen growing 1 percent, slightly weaker than the previously forecast 1.1 percent expansion.
The job market woes are expected to continue as the forecasters revised up their projection for unemployment rate. The jobless rate is expected to be 12.3 percent this year and 12.2 percent in 2014, up from previous projections of 12.1 percent and 11.9 percent respectively.
In the bulletin, the central bank said that it expects the interest rate cut last week to contribute to the prospects for an economic recovery later in the year. It added that the quarter-point reduction in interest rate last week was consistent with low underlying price pressure over the medium term.
The risks surrounding the economic outlook for the euro area continue to be on the downside, the bank said.
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