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ECB set to revise down growth forecasts, announce loans to banks

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After the growth pace in the euro area halved to 0.2 percent in the third quarter from the previous three months, it seems that the European Central Bank’s September forecasts were rather optimistic.

Next week, the ECB will revise its growth projections for the euro area, where cutting growth estimates seem to be a highly expected scenario.

While the ECB may announce the end of its asset purchases program, the central bank will offer new long-term loans to banks and will go slow on the borrowing cost to stimulate growth in the euro region, according to Bloomberg.

Several factors such as Italy’s potential recession, Brexit worries, political and economic uncertainty and trade tensions could keep growth soft.

Data due next week may signal further ease in the euro area Composite PMI of manufacturing and services to 52.5 in December from November’s four-year low of 52.7.

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