Publication - March 2017 ECB staff macroeconomic projections for the euro area
The economic recovery in the euro area is projected to firm further, at a pace slightly above previous expectations. The expected global recovery and resilient domestic demand, supported by the very accommodative monetary policy stance, past progress made in deleveraging across sectors and a continued improvement in the labour market are projected to sustain the recovery over the projection horizon.
The recent oil price rise is expected to lead to HICP inflation averaging 1.7% this year. However, underlying inflationary pressures are seen to be rising only gradually over the projection horizon.
Real economy
Short-term indicators suggest continued robust growth in the near term. Real GDP rose by 0.4% in the fourth quarter of 2016. The recovery is becoming more broad-based, both across sectors and across countries within the euro area. Labour market conditions have continued to improve in recent months, with unemployment rates falling slightly more than expected. While indicators of economic policy uncertainty increased, indicators of financial and economic uncertainty remain low (see Box 1). In addition, confidence has continued to improve, suggesting resilient growth in the first half of 2017.
Over the projection horizon, real GDP is expected to grow by 1.8% in 2017, by 1.7% in 2018 and by 1.6% in 2019. Domestic demand has been the mainstay of the recovery since mid-2013, including robust private consumption and a positive contribution from investment. A number of favourable factors are expected to continue to support domestic demand over the projection horizon, underpinned by the ECB’s very accommodative monetary policy stance. Euro area exports are also projected to strengthen over the projection horizon, supported by an expected recovery in global trade and the past weakening of the exchange rate of the euro.
Directorate General Communications
Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany
Tel.: +49 69 1344 7455, E-mail: media@ecb.europa.eu
Website: www.ecb.europa.eu
page source http://www.ecb.europa.eu/pub/
