Prevailing uncertainty, stemming from the US-China trade tensions, slowdown of growth in China and Europe’s internal problems, have all weakened the outlook for the economy. The growth forecasts for the current year have broadly been revised downwards, also for the euro area by the ECB staff in March.
While some indicators hint for stabilization, much of the recent data continue to be weak, especially for the manufacturing sector. There are both country- and sectorspecific factors, and the impact of these factors is turning out to be somewhat longer-lasting, slowing down growth momentum during the current year. The slowdown of growth has been accompanied with moderating inflation.