Economic growth is forecast to keep the pace registered in the first half of 2018. Gross fixed capital formation is expected to be the main driver of growth due to still favorable financing conditions and expectations on economic activity remaining positive.
Annual inflation is expected to be around the ECB target of 2% until the end of the year, fueled by substantial increases in energy prices. Core inflation remains subdued.
Risks to the outlook continue to originate from global trade tensions and an escalation of the currency crises in some developing economies.