Several European Central Bank policymakers think the bank's economic projec...
FRANKFURT - Several European Central Bank policymakers think the bank’s economic projections are too optimistic as growth weakness in China and trade tensions linger, four sources with direct knowledge of discussions said.
With the ECB using the these projections as a key input into policy decision, more cuts in growth and inflation forecasts would raise the chance that the bank’s first post crisis rate, now seen next year, is delayed even longer.The central bank has so far maintained that many of the factors holding down growth are temporary, so the economy would rebound in the second half, after waning exports and eroding confidence nearly dragged Germany into recession late last year.
While Germany’s vast car sector did take a one-off hit from an adjustment to new emissions-testing methods, more permanent factors could include shifting consumption habits, a move away from diesel and weak Chinese demand, some governors argued, according to the sources.
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