In World Economy News 13/01/2016
Euro area economic recovery is set to continue at a moderate pace, led by private consumption, three leading institutes said in a joint report on Tuesday.
Gross domestic product is expected to grow 0.4 percent each sequentially in the first and second quarters of this year, the German Ifo, the French Insee and the Italian Istat institutes said. For the fourth quarter of 2015, growth was estimated at 0.4 percent.
Growth for full year 2015 was estimated at 1.5 percent, led by a 2.2 percent increase in investment and 1.7 percent rise in consumption.
A renewed drop in oil prices and higher earnings on labor are set to stimulate private consumption, while fiscal stimuli, mainly in Germany, are likely to boost public spending, the report said.
Further, total investment is expected to benefit in the first two quarters of this year from favorable financing conditions and rising capacity utilisation.
The report forecast inflation to rise modestly from 0.2 percent in the final three months of 2015 to 0.5 percent in the first three months of 2016, and reach 0.4 percent in the second quarter. The forecast is based on the assumption of a fixed oil price of $35 per barrel and a stabilization of the EUR/USD exchange rate at 1.08 in the coming quarters.
