FRANKFURT, Germany – The Eurozone growth is expected to continue growing before the year ends.
The European Central Bank (ECB) said in their statement in Economic Bulletin that the Eurozone economy is set to continue its growth during the second half of this year. The positive growth is boosted by factors such as a small but significant growth in employment as well as private consumption. Although the Eurozone growth for the next quarters will be positive, ECB also said the increase would only be modest.
From the statement given by ECB in the bulletin, the data and survey results that are going to come predicts a moderate, but still positive, economic growth within the second half of the year. This news is promising as ECB has been hugely consistent with its policy statement in October. ECB also continued with the statement by saying that the growth pattern expected for the Eurozone economy can be mainly attributed to the continuing uncertainties in the market and the global trend starting to get weaker.
EU also said during its quarterly report that the Eurozone is set to grow by 1.1% this 2019, cutting their 1.2% forecast in July. From this, the expansion rate prediction for next year would rise to 1.2%, from the 1.4% rate they previously expected.
As the government starts slashing debt, the deficit for the Eurozone will reach 0.8% as the year ends from the 0.9% forecast earlier this year, according to the EU.
Meanwhile, policymakers are looking for the best ways to revive the moderately increasing, yet nearly stagnating Eurozone economy. Christine Lagarde, ECB’s new president, is looking for ways to revamp the economic growth and bridging the gap of ultraloose monetary policies. In addition, Lagarde also called for Germany and the Netherlands, among other Eurozone members who have budget surpluses and low debt levels to help stimulate the economy and boost public spending.
With the continued slowing of the growth in the economy, a stimulus package was approved by the ECB last September. It helps in cutting the rates much deeper, nearing the negative territory with promises for much lower rates available for a longer period. It also includes starting indefinite buys of assets to help lower the costs of long-term borrowing.
ECB also said that the risks when it comes to the global economy continue to the downside despite the increase in trade disputes. The overflowing uncertainty on the market, specifically the potential slowing of recovery in various market economies that are still emerging and the Brexit, are also significant risks to economic growth.