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MNI INTERVIEW: ECB Growth Forecasts Over-Reliant On China

(MNI) LONDON

The ECB's growth forecasts contain "heroic" assumptions about China, a former senior Bank of France official tells MNI.

Recent upward revisions to European Central Bank’s growth forecasts are dangerously reliant on optimistic assumptions about trade with China, a former senior Bank of France official told MNI.

Eurosystem staff projections for 2023 growth rose from 0.5% last December to 1.0% in March, a revision Laurent Ferrara, deputy head then head of the International Macroeconomics division at the Banque de France from 2010-2019, described as “huge” and “surprising” given that household consumption forecasts were not changed, while business investment was revised downward

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Recent upward revisions to European Central Bank’s growth forecasts are dangerously reliant on optimistic assumptions about trade with China, a former senior Bank of France official told MNI.

Eurosystem staff projections for 2023 growth rose from 0.5% last December to 1.0% in March, a revision Laurent Ferrara, deputy head then head of the International Macroeconomics division at the Banque de France from 2010-2019, described as “huge” and “surprising” given that household consumption forecasts were not changed, while business investment was revised downward

Keep reading...Show less