Euro area economy steams ahead in Q2 as ECB waits for inflation
Zurich, Switzerland - The euro area economy expanded apace in the second quarter, a sign the bloc’s upswing is becoming increasingly robust and self-sustaining.
Gross domestic product in the 19-country region rose 0.6 per cent in the three months through June, after increasing 0.5 per cent at the start of the year.
Figures from economic confidence to joblessness and manufacturing output have signaled the economy was gaining steam, underpinning expectations by the European Central Bank (ECB) that price pressures would eventually begin to build.
Policy makers are preparing for a debate in the autumn about the future path of quantitative easing, which has helped reduce financing costs for firms and households, thus stimulating demand.
“The ECB expects solid, broad-based growth in the period ahead, and it’s pretty likely this will happen,” said Holger Sandte, chief European analyst at Nordea Markets in Copenhagen. “They will welcome these numbers but the focus will be on core inflation - whether it picks up and how fast.”
ECB President Mario Draghi has expressed confidence that the solid, broad-based recovery will extend into the second half, with a healing labour market and a closing output gap fuelling a sustained inflation pickup.