ECB: Growth, CPI Risks Relate To Financial Market Tensions

Persisting financial market tensions pose a downside risk to economic growth and could have a negative impact on price stability, the European Central Bank said Thursday.


Economic growth in the euro zone is set to grow moderately, subject to "Particularly high uncertainty," the ECB said in its Monthly Bulletin.

"Downside risks mainly relate to the ongoing tensions in some segments of the financial markets in the euro area and at the global level," the ECB said.

The ECB also said price stability could come under threat should financial market tensions deepen and monetary liquidity tighten.

"While an orderly adjustment of monetary liquidity through redemption of credit and further slow money growth may thus still be required, a disorderly adjustment in combination with further sharp asset price movements could lead to adverse effects on price stability over the medium term," the ECB said.