ANKARA

The head of the European Central Bank (ECB) announced on Thursday that euro area GDP growth is projected to be 0.8% this year and 1.3% in 2021, down from estimates before the global coronavirus outbreak.

"The projections foresee very muted growth in the first half of 2020, followed by an improvement in the second half of the year,” ECB President Christine Lagarde said at a press conference.

The downgraded forecast was due to the potential economic impact of the coronavirus outbreak, she added.

"The disruption of supply chains is impeding production plans in the manufacturing sector, while necessary containment measures against further spread of the coronavirus are adversely affecting economic activity," Lagarde said.

She added that growth was expected to regain traction over the medium term, supported by favorable financing conditions, the euro area fiscal stance, and the expected resumption of global economic activity.

On Thursday, the ECB also kept key interest rates unchanged and announced a new stimulus package to support the euro area financial system.