Draghi Says Inflation Risks Low as Crisis Reaches Germany

The chickens come home to roost.  European Central Bank President Mario Draghi said inflation risks are “very low” and the debt crisis is starting to hurt Germany, Europe’s largest economy, Bloomberg told us.

The European Commission today cut its 2013 growth forecast for Germany to 0.8 percent from 1.7 percent and said the euro- area economy will expand just 0.1 percent after contracting 0.4 percent this year. Germany sells about 40 percent of its exports within the 17-nation euro area. Factory orders and industrial production slumped in September and business confidence is at a 2 1/2 year low.

In the euro area, “overall economic activity is weak and it is expected to remain weak in the near term,” Draghi said. Because of that, inflation risks “are currently very low over the medium term,” he said….

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