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ECB Lifts Growth & Inflation Projections For This Year; Cuts 2020 Outlook

The European Central Bank on Thursday raised the growth and inflation outlook for this year, but trimmed the same for 2020.

Citing the latest ECB staff macroeconomic projections, ECB President Mario Draghi said in Vilnius, Lithuania, that the euro area growth forecast for this year was raised to 1.2 perent from 1.1 percent seen in March.

The outlook for next year was slashed to 1.4 percent from 1.6 percent and the forecast for 2021 was cut to 1.4 percent from 1.5 percent.

"The risks surrounding the euro area growth outlook remain tilted to the downside, on account of the prolonged presence of uncertainties, related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets," Draghi said in his introductory statement.

While the weakness in the global trade is weighing on the euro area manufacturing sector, services and construction sectors are showing resilience and the labor market keeps improving, Draghi noted.

The bank raised the inflation projection for this year to 1.3 percent from 1.2 percent on favorable monetary policy pressures and stronger wage growth.

However, the projection for next year was cut to 1.4 percent from 1.5 percent and the outlook for 2021 was left unchanged at 1.6 percent.

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