FRANKFURT (Reuters) - The European Central Bank on Thursday lowered some of its inflation projections to reflect a firming euro but lifted some growth forecasts after the euro zone economy registered its best growth run in a decade.
The euro has gained 13 percent against the dollar this year, a mixed blessing for the ECB as it reflects a robust economy but caps inflation by reducing the cost of imports.
The ECB now sees inflation of 1.5 percent in 2017 and 1.2 percent in 2018, compared with its forecasts of 1.5 percent and 1.3 percent respectively from June. Both are well below its target of just under 2 percent.
Growth this year was seen at 2.2 percent versus an earlier 1.9 percent forecast.
The following are the ECB staff’s new projections for inflation and GDP growth, with June’s forecasts in brackets. The ECB updates projections once a quarter.
GDP growth 2.2 1.8 1.7
Inflation 1.5 1.2(1.3 1.5
Reporting by Balazs Koranyi; Editing by Catherine Evans