EM Slowdown Puts Eurozone Recovery At Risk, ECB's Draghi Says

By MarketWatch Pulse

The slowdown in emerging market economies could hurt the eurozone's economic recovery, European Central Bank President Mario Draghi said Thursday. "The risks to the euro area growth outlook remain on the downside, reflecting in particular the heightened uncertainties regarding developments in emerging market economies, which have the potential to further weigh on global growth and foreign demand for euro area exports," Draghi said at a news conference. The ECB boss said concerns over growth in emerging markets are weighing on prospects for eurozone inflation, so a thorough analysis of the medium-term impact of those issues is needed."Increased uncertainty has recently manifested itself in financial market developments, which may have negative repercussions for euro area domestic demand," Draghi said. Given this, he hinted the central bank may lower the deposit rate further or expand its quantitative easing at its December meeting.

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