ECB says Eurozone recovery increasingly supported by domestic demand

Author: Mike Paterson | Category: Central Banks

Comments in the latest ECB Economic Bulletin released a little earlier

  • risks remain to the downside

Says the ECB:

"Looking ahead, the economic recovery is expected to proceed, although risks remain on the downside. Domestic demand should be further supported by the ECB's monetary policy measures and their favourable impact on financial conditions, as well as by the earlier progress made with fiscal consolidation and structural reforms. Moreover, low oil prices should provide support for households' real disposable income and corporate profitability and, therefore, private consumption and investment.

 In addition, government expenditure is likely to increase in some parts of the euro area, reflecting measures in support of refugees. However, the economic recovery in the euro area continues to be dampened by subdued growth prospects in emerging markets and moderate global trade, the necessary balance sheet adjustments in a number of sectors and the sluggish pace of implementation of structural reforms.

The risks to the euro area growth outlook remain on the downside and relate in particular to the heightened uncertainties regarding developments in the global economy as well as to broader geopolitical risks. These risks have the potential to weigh on global growth and foreign demand for euro area exports and on confidence more widely"

Full bulletin here

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