The European Central Bank (ECB) sees an opportunity to revise its political guidelines in early 2018 as the economy improves. At the same time, however, it is specified that if necessary, changes will be made slowly. It is clear from the document that markets can soon begin to prepare for the end of monetary stimuli.
At its last meeting in mid-December, the regulator confirmed its decision to extend quantitative easing program at least until September this year, with a monthly volume of 30 billion EUR. It is specified that in fact this measure will continue until a steady correction of the inflation trend in line with the target of about 2%.
Inflation in the Eurozone in November was 1.5%, according to Eurostat’s preliminary estimate, slightly rising from 1.4% in October. The slight increase was due to the surge in energy costs, which was somewhat offset by the fall in food prices.
The latest data, including the experts’ forecasts, feeds the expectations that inflation will move closer to the ECB’s target, but there is still no lasting trend. The latest central bank forecasts show that inflation will increase to 1.7%.
According to the ECB, the latest economic indicators give a clear signal of continued strong and increasingly sustainable expansion in the Eurozone. The real GDP growth is 0.6% in Q3 2017. The labor markets also show continuing trend improvement. In terms of domestic demand components, the private consumption growth remains strong, supported by real disposable income growth, based on employment growth and low inflation.
The synchronized global recovery of economic activity continues. There is a steady and broad-based growth rate in the world economy in the second half of 2017. The global trade is also recovering, with commodity imports rising by 1.6% in the third quarter from 0.4% in the previous quarter.
The global inflation is slightly down in October. The annual consumer price growth in the OECD countries declined to 2.2% in October from 2.3% in September.
According to Eurostat’s second estimate, real GDP growth in the Eurozone was 0.6% in the third quarter of 2017. The breakdown by components reveals that domestic demand is the main driver of growth, but exports also make a positive contribution. The exports to the Eurozone remain stable in the third quarter.
In December, macroeconomists forecast real Eurozone GDP to rise by 2.4%, 2.3%, 1.9% and 1.7% respectively in 2017, 2018, 2019 and 2020 respectively.