European central bank notes prolonged uncertainty in eurozone economic outlook

FRANKFURT -- Softening global growth and international trade are still weighing on the 19-member eurozone outlook, and the prolonged presence of uncertainties is dampening economic sentiment, the European Central Bank (ECB) said in its latest issue of Economic Bulletin on Thursday.

Despite some signs showing the resilience of the economy, the ECB pointed out factors that are driving economic sentiment lower, especially in the manufacturing sector, including "the prolonged presence of uncertainties, related to geopolitical factors, the rising threat of protectionism and vulnerabilities in emerging markets".

The ECB reiterated its concern about the area's inflation, which still falls short of its aim, and noted that "a significant degree of monetary stimulus continues to be necessary" to ensure favorable financial conditions and headline inflation developments over the medium term.

The latest remarks from the central bank are largely in line with its policy statement after July's meeting, in which the ECB kept key interest rates unchanged but revised forward guidance to open doors for possible monetary policy easing.

After the euro area real GDP increased by 0.4 percent quarter-on-quarter in the first three months of 2019, incoming economic data and survey information suggest somewhat slower growth in the second and third quarters, the ECB said Thursday.

However, the bank added that activity in the services and construction sectors is resilient and the labor market continues to improve.