The European Central Bank on Thursday slashed its growth forecasts for the euro area both this year and next year and projected a return to growth in 2014.

ECB president Mario Draghi told a news conference in Franfkfurt that the bank's staff projections for the euro area project a contraction of 0.5 percent in the eurozone economy this year, and another contraction of 0.3 percent in 2013.

But the region's economy is expected to return to growth of 1.2 percent in 2014, Draghi added.