ECB: Euro Zone Survey Data Point to Robust First Quarter
Economic recovery in the Eurozone is stable, according to the economic bulletin of the European Central Bank, quoted by BNR.
‘’Incoming data, notably survey results, have increased the Governing Council’s confidence that the ongoing economic expansion will continue broaden’’, the ECB said in its regular economic bulletin.
‘’Surveys point to a robust growth momentum in the first quarter of 2017’’.
But even as growth picks up, the ECB warned that the rise in inflation will be more subdued with oil futures implying stable crude prices and suggesting only a ‘’very limited’’ impact on energy prices on inflation.
Having fought ultra-low inflation for years, the ECB remains concerned that the recent spike in price growth is only due to rise oil prices and thus temporary, requiring continued stimulus.
The bank noted that wage growth, a key condition for a rise in inflation, remains low by historic standards, suggesting ample slack in the economy and weak productivity growth.
‘’In contrast to energy inflation, the expected pick-up in (headline) inflation excluding energy and food is likely to be much more gradual’’, the ECB said.
‘’There’re only weak signs of upward pipeline price pressures’’, ECB added.