Eurozone economy recovers slightly, growth seen at 0.2-0.5% in Q1-Q3
The Eurozone’s economy is expected to recover slightly in 2015, according to three leading research institutes.
Gross domestic product looks set to grow by 0.4% in the first three quarters of the year, versus just 0.2% and 0.3% in the third and fourth quarter of 2014 respectively, said the results of calculations by the Ifo Institute (Munich), INSEE (Paris) and Istat (Rome).
In the wake of the euro’s depreciation, the economy was boosted by an upturn in exports, coupled with robust growth in private consumption fuelled by low energy prices. Disposable income levels are also expected to rise. Investments will increase slightly too, stimulated by i mproved lending conditions, rising domestic demand and the need for replacement investments. The three institutes expect investments to grow by 0.2%, 0.4% and 0.5% respectively in the first three quarters of 2015.
Based on the assumptions that the price of a barrel of crude oil remains at 56 dollars and that the euro-US dollar exchange rate stabilises at 1.10, prices are expected to fall by 0.3% in the first quarter of 2015. Prices will fall by only 0.1% in the second quarter. A positive inflation rate of 0.1% is subsequently expected for the third quarter.
This forecast is based on the assumption that the agreement between Greece and its creditors in the Eurozone holds firm.