Eurozone: the recovery continues amid risksEuro-zone economic outlook - 1st Quarter 2016
The recovery in the Eurozone is expected to continue at a moderate pace. Real gross domestic product is estimated to increase by 1.5% in 2015, and by 0.4% in comparison to the previous quarters in both Q1 and Q2 2016. Private consumption is set to continue to be the main driver behind the upturn, stimulated by a renewed drop in oil prices and higher earnings on labour. In addition, expansive stimuli from fiscal policy, mainly in Germany, are expected to raise public consumption. Favourable financing conditions and rising capacity utilisation are expected to give a lift to total investment in the first two quarters in 2016. Assuming a fixed oil price at 35$ per barrel and a stabilisation of the €/$ exchange rate at 1.08 in the coming quarters, inflation is expected to increase moderately and reach +0.4% in Q2 2016.