The outlook for output and inflation in the Eurozone continued to deteriorate, showed a key study by the European Central Bank on Friday. This once again stresses on the need to ramp up asset purchases by the ECB and continue experimenting with negative interest rates.

The regulator stood pat on the policy parameters following the meeting on Thursday and confirmed that it will resume asset purchases from November 1.

Growth and inflation forecasts for the current and next two years were lowered, and the “long-term” forecast for 2024 remained unchanged at a relatively low level, according to the quarterly Survey of Professional Forecasters, which has a significant impact on the ECB’s monetary policy debate.

The forecast for inflation were revised lower with inflation for the current year declining from 1.3% to 1.2%, and from 1.4% to 1.2% for 2020 and from 1.5% to 1.4% in 2021.

The long-term forecast remained unchanged at 1.7%, which is below the ECB inflation target of about 2%. Long-term core inflation forecast was lowered from 1.7% to 1.6% while output projections pointed to further moderation from 1.3% to 1.0% for 2020.

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