European Commission leaves eurozone growth forecasts unchanged for 2020 and 2021

The European Commission (EC) left its growth forecast for the eurozone for 2020 and 2021 unchanged at 1.2%, the EC's Winter 2020 Economic Forecast report showed on Thursday.

"The outlook for 2020 and 2021 is unchanged as more positive developments are counterbalanced by negative events elsewhere," the publication read, as reported by Reuters.

On the other hand, the Commission raised its inflation forecast to 1.3% for 2020 and 1.4% for 2021 from 1.2% and 1.3%, respectively. "Still, domestic price pressures are expected to build up only slowly as firms are likely to continue tolerating lower profit margins," the Commission said.

Regarding the coronavirus outbreak's potential impact, "the baseline assumption is that the outbreak peaks in the first quarter, with relatively limited global spillovers," the EC stated. "The duration of the outbreak, and of the containment measures enacted, are a key downside risk. The longer it lasts, the higher the likelihood of knock-on effects on economic sentiment and global financing conditions."

EUR/USD reaction

The EUR/USD pair largely ignored this publication and was last seen trading at 1.0880, up 0.08% on a daily basis.