The European Commission (EC) has downgraded its forecast for inflation and growth in the Eurozone, citing turbulence in foreign markets and ongoing global economic weakness. In a statement released on Tuesday (3 May), the EC said low oil prices and a far-from-stable worldwide economy were behind its decision to trim its forecast for consumer prices growth in the Eurozone over 2016 and 2017.

The EC expects inflation to rise only to 0.2% this year, compared with a 0.5% forecast in February and a 1% forecast in November and comfortably below the 2% targeted by the European Central Bank (ECB). Meanwhile, in 2017 inflation is expected to get closer to the ECB target at 1.4%, although the figure represented a downgrade from the 1.5% forecast released in February and the 1.6% rate of growth that was expected at the end of last year.

Because of low growth levels and stagnant wages, "core inflation has so far failed to show an upward trend," the EC said in a statement, adding inflation in the Eurozone is expected to remain "very low for longer than previously forecast."

A number of factors, including ongoing weakness in the oil market, were to blame for the downwardly revised forecast.

"Oil prices fell again at the start of 2016, dragging inflation below zero," the Commission added.

"External price pressure is also weak due to the slight appreciation of the euro and over-capacities in several emerging market economies that are holding back global producer prices."

However, the Commission indicated the ECB's stimulus package had at least succeeded in ensuring continued growth in Europe.

"Growth in Europe is holding up despite a more difficult global environment," said Pierre Moscovici, the EU's economic chief.

On Friday (29 April), data showed the Eurozone economy grew 0.6% in the first quarter, exceeding analysts' expectations for a 0.3% expansion and out-performing the rate of growth recorded before the financial crisis in 2008. However, policymakers in Brussels warned that the better-than-expected economic data seen so far in 2016 could be short-lived due to worldwide market volatility.

The Commission now expects the Eurozone economy to grow 1.6% this year and 1.8% in 2017, compared with a February forecast calling for 1.7% and 1.9% growth respectively.