German and French economic growth forecasts cut

 
Jessica Morris
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Germany and France are the two biggest Eurozone economies (Source: Getty)

France and Germany have had their growth forecasts trimmed, in another sign that the Eurozone's economic recovery could be at a low ebb.

Germany's central bank, the Bundesbank, chopped its gross domestic product forecast by 0.1 percentage points to 1.7 per cent for this year, and by 0.3 percentage points to 1.4 per cent in 2017.

Read more: Inflation rate still negative in Eurozone as ECB policies having muted effect

France's gross domestic product estimate was also slashed by 0.1 percentage point to 1.5 per cent by its central bank, the Banque de France.

It comes a day after the European Central Bank (ECB) hiked its 2016 forecasts for growth and inflation. ECB president Mario Draghi said that while risks to the Euro area's growth outlook had decreased, they still remain to the downside.

The ECB has been fighting lacklustre growth and inflation in the single currency area with an arsenal of tools, including billions of euros in stimulus, negative interest rates and a series of cheap loans for banks. Draghi has been keen to stress that it would be able to do more if the economic outlook worsened.

Read more: ECB tells Germany it won't be taking any more flak

The Bundesbank expects German inflation to soar from 0.2 per cent this year to 1.5 per cent next year and 1.7 per cent in 2018.

Banque de France has pencilled in inflation growth rising from 0.2 per cent this year, to 1.1 per cent in 2016 and 1.4 per cent in 2018.

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