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ECB cuts economic growth outlook amid weaker expansion, protectionism

The European Central Bank cut its economic growth outlook for the eurozone amid political tensions and the threat of trade protectionism.

The central bank now expects GDP growth of 1.9% in 2018 and 1.7% in 2019, down from the previous forecasts of 2.0% and 1.8%, respectively.

ECB President Mario Draghi told a news conference that growth in the eurozone has been weaker than expected and signaled some slower momentum ahead.

"[T]he balance of risks [for eurozone growth] is moving to the downside owing to the persistence of uncertainties related to geopolitical factors, the threat of protectionism, vulnerabilities in emerging markets and financial market volatility," Draghi said.

Meanwhile, the inflation outlook was revised to 1.8% in 2018 and 1.6% in 2019 from 1.7% in both years, with underlying inflation expected to increase over the medium term, boosted by the central bank's monetary policy moves, the continued economic expansion and rising wages, Draghi said.

The outlook changes came as the central bank said it intends to proceed with its plan to end net asset purchases at year-end. The ECB also kept its interest rates unchanged.