FXStreet (Mumbai) – President Draghi, while addressing a question on China slowdown, said a marked slowdown in China would have a negative impact on the Eurozone through different channels – direct, indirect, confidence, and financial.
Draghi said EZ’s total exports to China are just 6% of the total exports, but mentioned some countries like Germany have a larger exposure (10% of exports to China). Thus, a slowdown in China would have direct impact on countries like Germany.
Furthermore, a slowdown in China would kill commodity prices and therefore poses downside risk to inflation – an indirect channel, Draghi said.
The president added further that a marked slowdown in one of the biggest economy in the world could rattle confidence in the financial markets and business confidence.
(Market News Provided by FXstreet)