–France’s Insee/Germany’s IFO/Italy’s ISAE Release Joint Forecasts
FRANKFURT (MNI) – Eurozone economic activity should decelerate
markedly to 0.3% q/q in the second quarter and then grow 0.4% in each of
the final two quarters of the year, three top EMU statistical research
groups said Wednesday.
The joint projections by the national statistics office of France
and Italy and the leading private institute in Germany expect inflation
to stabilize after the recent strong rise and to hover around 2.7% for
the remainder of the year.
The projections assume the Brent oil price to adhere to US$115 per
barrel and the euro/dollar exchange rate to fluctuate around 1.44 over
the forecast horizon. “The external pressures are expected to ease, due
to oil prices’ stabilization, while some upward inflationary impulses
would emerge because of the diffusion of past increases in commodity
prices to core inflation,” the institutes said.
The institutes said that as global demand is expected to moderate,
“consumption and investment should be the main driving forces of GDP
growth over the forecast horizon.”
Eurozone industrial production, on the other had will likely
moderate as indicated by recent PMI data, the release said. The
institutes expect industrial production in the common currency area to
drop to 0.4% in the last two quarters of 2011 from 0.7% in 2Q.
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–Frankfurt bureau; +49-69-720142; jtreeck@marketnews.com
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