ECB survey: Brexit to hit eurozone economic growth

Britain's plan to leave the European Union will take its toll on the eurozone economy, a survey released on Friday by the European Central Bank showed.

The 19-member eurozone will expand by 1.6 per cent this year before slowing to 1.4 per cent in 2017, according to the ECB's quarterly Survey of Professional Forecasters.

The currency bloc should regain momentum in 2018 to expand by 1.6 per cent, the survey found.

The projections were the average of the predictions made by the 51 EU analysts participating in the survey.

In the last survey released in April, forecasters had projected a growth rate of 1.6 per cent in 2017 and 1.7 per cent for 2018.

"Based on the qualitative comments provided by the respondents, these revisions largely reflect an expected negative impact on the euro area from the UK referendum result," the ECB said on releasing the survey's findings.

The ECB's latest forecasters' survey was conducted between June 30 and July 6, after the June 23 British referendum to leave the EU.

Speaking at a press conference on Thursday, ECB chief Mario Draghi said the bank believed the actual impact of Britain's EU departure would depend on the length of London's negotiations and the final outcome.

In line with ECB projections, the forecasters expect inflation in the eurozone to remain weak but that consumer prices should pick up in the coming months.

Consumer prices in the currency bloc should increase by an annual 0.3 per cent this year before rising 1.2 per cent in 2017 and 1.5 per cent in 2018, according to the forecasters' survey.

The ECB is set to release its own new inflation and growth forecasts on September 8.

Last update: Fri, 22/07/2016 - 16:44
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