Euro-zone economic outlook

Growth in the euro area continued to consolidate. GDP in the second quarter accelerated (+0.6% in Q2 2017 compared to +0.5% in Q1).

Leading and coincident economic indicators remained positively oriented and the economic growth is expected at the same pace in Q3 and Q4 2017 as in Q2 (+0.6%), before a slight deceleration in Q1 2018 (+0.5%).

The main force behind this expansion should be investment, which will benefit from favourable financing conditions and from the improvement in bank lending conditions.

Moreover consumption is expected to continue to expand slowly but steadily (+0.4% over the forecast horizon), supported by favourable labour market conditions and increasing wages.

The positive outlook for the global economy is likely to support external demand, although hampered by the competitiveness losses due to the recent appreciation of the euro. Over the forecast horizon, core inflation is projected to increase
modestly.