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Small Economic Gain Projected in Eurozone Through 2016

FILE - The new headquarters of the European Central Bank in Frankfurt, Germany, Nov.17, 2014.
FILE - The new headquarters of the European Central Bank in Frankfurt, Germany, Nov.17, 2014.

The European Central Bank is predicting the economy in the continent's 18-nation euro currency bloc will barely advance in the next two years.

The bank projected Thursday that the eurozone economy, collectively the world's largest, would gain eight-tenths of a percent this year, 1 percent next year and 1.5 percent in 2016, all down from earlier estimates.

In addition, the bank predicted the cost of living in the eurozone would increase only marginally through 2016, and stay below the 2 percent inflation target that financial policy makers in Europe and the United States consider ideal.

Central bank president Mario Draghi said the "risks surrounding the economic outlook for the euro area are on the downside."

He said the bank has "stepped up" its preparations for possibly launching new measures early next year to boost the eurozone economy.

The European Central Bank could make large-scale purchases of government bonds to boost economic growth and inflation, much like central banks in the U.S., England and Japan have bought massive amounts of securities in recent years in an attempt to bolster their economies.

The direct government support has pushed the American economy, the world's biggest national economy, toward sustained gains, but Japan has fallen into a recession and Britain's advance has been under one percent.

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