The EU on Thursday slashed its growth estimate for the 19-member Euro area economy next year as a global slowdown amidst a hard landing in China overpowers gains from a weaker euro and cheaper oil prices.
The region's economy is tipped to expand by 1.8 per cent in 2016, down from 1.9 per cent projected earlier.
Inflation is likely to accelerate to 1.6 per cent in 2017 from 0.1 per cent this year, the EU said.
That the Euro area economy is feeling the pain of a global slowdown was evident in German manufacturing data released on Thursday which showed that factory orders in Germany, Europe's biggest economy tumbled in September, pouring cold water on the hopes of a strong recovery in the Euro area economy. German factory orders slipped 1.7 per cent in September from the previous month, when they declined 1.8 per cent, the Economy Ministry in Berlin reported on Thursday.
A weaker than expected growth outlook in the Euro area economy has buoyed bets of further stimulus firepower from the European Central Bank (ECB). Mario Draghi, the ECB President said that the Frankfurt-based central bank will consider how to step up its stimulus program if it feels that the monetary easing measures it has undertaken thus far are inadequate to help the region's economy return to price stability and solid growth. Draghi last month said that the ECB officials may take a call on boosting stimulus at the December policy meet.