The recovery of the euro-zone economy is not slowing down, Bloomberg writes citing the results of the survey of economists.
Analysts polled by the agency raised the forecast for growth in 2018 to 2.2%. The growth in 2017 is estimated at 2.4% – this is the maximum rate for the decade.
The current optimism contrasts with the forecasts in early 2017, when economists noted a slowdown in growth.
The monetary block from 19 countries started the year with a series of positive data. In particular, there was an improvement in business sentiment in Germany and France – the largest economies of the eurozone. Improvements give more reason to the European Central Bank (ECB) to prepare to stop stimulating the economy.
The ECB recognized the recovery, noting an “increasingly self-sufficient” growth in the euro area. In the minutes of the December meeting of the central bank also noted that the tax reform in the US may have more than expected effect on the growth of the euro area.
According to the protocols, the regulator believes that at the beginning of 2018, the position regarding the statements on monetary policy should be revised.
But as inflation still has not reached the target level of “just below 2%,” any changes will be gradual. Economists surveyed by Bloomberg forecast an increase in consumer prices in the euro area by an average of 1.5% this year and 1.6% in 2019. At the same time, interest rates are not expected to increase until 2019.
Meanwhile, the euro is strengthening against the background of economic growth the euro area. The exchange rate of the European currency has already increased by about 1.6% since the beginning of the year after a 14% jump in 2017. There is a risk that this may affect growth and suppress inflation.
Analysts expect that the economies of Germany, France and Spain this year will grow by 2% or more. In Italy, where elections are a key risk, growth may slow to 1.4% from 1.6%, although this rate is still much higher than the average for the previous five years.
The growth of key euro-zone economies will help Greece. German tour operator TUI AG reported that orders for tours to Greece this year increased by 16%. The tourism sector is likely to continue to support the economy of Greece, which needs investment. Economists predict the country’s GDP growth of 2.2% this year.
