ECB upbeat on growth prospects

Economic data points to solid growth in the eurozone in the second quarter of the year and indicates a rebound in global growth after a rough patch, the European Central Bank (ECB) said in a regular economic bulletin published yesterday.

Inflation will hover near the current level in the coming months and while there is still no convincing upswing in consumer prices, there are early signs of pipeline price pressures in the production and pricing chain, the ECB added.

“Overall, incoming data point to solid growth in the second quarter of 2017,” the ECB said in a bulletin that is largely consistent with the outlook presented after its June policy meeting earlier this month.

“Domestic demand is expected to be buoyed by a number of favorable factors,” it said.

“Very favourable financing conditions and low interest rates continue to promote a recovery in investment in the context of rising profits and lower deleveraging needs,” the ECB added.

The latest commentary follows on from the ECB, on Wednesday, suggesting that risks to global growth appear to have diminished, with markets so far taking policy tightening from the US Federal Reserve in their stride.

However, in that earlier commentary the ECB warned the outlook remains tilted toward the downside due to new factors; notably signals from the US suggesting a shift toward protectionism, medium-term growth prospects for the Chinese economy and uncertainties over Britain’s exit from the EU.

“Overall, although some risks appear to have diminished, the balance of risks to the global outlook remains tilted to the downside,” the ECB said.

-Reuters


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