FRANKFURT AM MAIN: European Central Bank chief Mario Draghi warned Thursday of "some moderation" in the eurozone's growth pace as protectionist threats mount, in a more pessimistic assessment of the region's outlook than in previous months.
"Following several quarters of higher than expected growth, incoming information since our meeting in early March points towards some moderation while remaining consistent with a solid and broad-based expansion of the euro area economy," Draghi told reporters in Frankfurt.
A slew of hard and soft economic data in recent months has suggested the single currency area lost some momentum at the start of the year after a robust 2017.
Concerns about protectionist threats, geopolitical risks and global trade tensions have added to doubts about the strength of the eurozone recovery.
"It's quite clear that since our last meeting broadly all countries experienced... some moderation in growth or some loss of momentum," Draghi said after a meeting of the bank's governing council.
"These declines were sharp and in some cases the extent of these declines was unexpected," he went on.
A key survey of eurozone business activity, the purchasing managers' index, was flat in April at 55.2, data company IHS Markit said this week, describing the region's economy as "stuck in a lower gear".
In Germany meanwhile, Europe's powerhouse economy, the latest surveys have recorded a drop in confidence among consumers, businesses and investors. German industrial orders and production data have also disappointed.
Draghi warned that rising protectionism was starting to pose a "more prominent" risk to the eurozone outlook, after US President Donald Trump fanned fears of a global trade war.
"Risks relating to global factors including the threats of increased protectionism have become more prominent," Draghi said.
Trump is expected to slap tariffs on European steel and aluminium imports from May 1 unless he agrees to sign a last-minute waiver -- which the German government on Thursday said seemed unlikely.
The US leader has also threatened tariffs on billions of euros in Chinese imports, prompting China to vow to respond in kind -- and leaving Europe's export-reliant firms on edge.
The trade tensions have so far mostly been limited to "rhetoric", Draghi said.
But "obviously we can't know what are going to be the direct effects of potential retaliation" if the US threats become reality, he went on.
"What is certainly known is that these events have a profound and rapid effect on confidence, on business confidence, on exporters' confidence, generally speaking, and confidence can in turn affect the growth outlook."
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