Eurozone Economic Forecast

Eurozone Economic Outlook

November 21, 2017

A preliminary estimate of GDP revealed that growth remained buoyant in the third quarter of 2017, on the back of solid activity in the region’s major players. Although a breakdown of components is not yet available, the region’s drivers are expected to have been largely unchanged, with tailwinds from high sentiment, accommodative monetary policy and a favorable external backdrop fueling both domestic demand and the external sector. Early data for the fourth quarter points to another period of strong growth. Economic sentiment rose to the highest level since January 2001 in October, and the composite PMI continued to signal brisk activity. Growing confidence in the Eurozone’s economic recovery led the ECB to finally announce a reduction its bond-buying program on 26 October, meeting analysts’ expectations. Starting in January 2018, the Bank will reduce the monthly pace of asset purchases from EUR 60 billion to EUR 30 billion. While economic activity remains strong, weak price pressures led the Bank to extend the program until at least September 2018, and monetary policy remains very accommodative overall.

Eurozone Economic Growth

The Eurozone economy is seen maintaining a brisk pace of growth next year, chiefly due to a stronger labor market and robust fixed investment. FocusEconomics analysts project that GDP will expand a solid 2.0% in 2018, which is up 0.1 percentage points from last month’s forecast. In 2019, momentum is seen waning slightly, and GDP is forecast to grow 1.7%.

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Eurozone Facts

ValueChangeDate
Exchange Rate1.180.65 %Dec 06
Stock Market1,225-0.52 %Dec 06

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