Oliver Q
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Oliver Q in European Markets,

China slowdown is already hurting Europe

China's slowing economy has already put a dent in Europe's recovery and could force the region's central bank to pump even more money into the system.

The European Central Bank on Thursday cut its forecasts for eurozone GDP growth for this year and next, pointing the finger squarely at falling demand from China and other emerging economies.

It also slashed its projections for inflation, saying consumer prices in the 19-country eurozone may rise by only 0.1% this year. Deflation may even return briefly, ECB President Mario Draghi said, due to falling oil prices.

"We may see negative numbers on inflation in the coming months," Draghi told reporters.

After cutting interest rates as low as they could go, Draghi launched a massive stimulus program earlier this year aimed at firing up growth and inflation.

The ECB has been buying 60 billion euros ($67 billion) worth of government bonds and other assets since March -- effectively printing money -- and the purchases are due to run for at least another year.