Euro-zone economic outlook

In Q1 2015, economic activity in the Eurozone sustained its growth momentum (+0.4%). Real domestic product is set to grow at a similar pace in Q2 (+0.4%) and accelerate slightly through the end of 2015 (+0.5% in Q3 and Q4), mainly driven by domestic demand. Growth is expected to average +1.4% in 2015, after +0.9 % in 2014.

Production should be driven primarily by a robust household consumption, as well as by an acceleration in productive investment. The labour market situation is expected to gradually improve and the unemployment rate is set to slowly reduce. This should encourage an upturn in real wages over the year and, along with a rise in employment, incur purchasing power gains substantial enough to maintain the momentum in household consumption. Under the assumption that Brent oil price remains stable at 65 USD per barrel and the dollar/euro exchange rate fluctuates around 1.12, inflation is projected to accelerate slightly to 0.2% in Q2 2015, and to reach +0.9% by the end of the year.

This forecast is based on the assumption that, despite the “no” victory in the Greek referendum, the stability of the eurozone will be preserved.