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Euro area experiencing protracted moderate growth
29-11-2019 08:12
Euro area experiencing protracted moderate growth
Euro area experiencing protracted moderate growth

Even minor economic growth is a welcome sign after stagnation. This is not the case for the eurozone as weak GDP growth points to serious problems. The period of moderate economic growth lasts longer than expected. Moreover, the statistics for the second half of the year have shown no changes, indicating that the eurozone economy still lacks momentum. The European Central Bank uses almost all available tools to stimulate economic growth, but these attempts are vain. “In the euro area we are also seeing protracted weakness... Data for the second half of the year point to continuing, moderate growth,” Ireland's central bank governor Gabriel Makhlouf, one of the new members of the Governing Council of the European Central Bank, said. The lack of progress is a serious reason for the ECB to review its monetary policy strategy. Mr. Makhlouf is sure that it is necessary to take on board the lessons of the global financial crisis and explore new mechanisms to resolve the situation. 

Nevertheless, the suggested measures might not bear fruit as the eurozone has to tackle the fallout from trade and geopolitical tensions as well as Brexit. This could force the ECB to provide even more stimulus in order to accelerate economic growth. “The trade tensions I mentioned and the uncertainty that this causes have had an effect on the manufacturing sector, particularly in Germany. But, despite this slowdown, the services and construction sectors continue to support growth. The labour market has also held up although many of you know that employment and wages are often lagging indicators,” Gabriel Makhlouf summed up.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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