EUROZONE: Economists expect sluggish growth of 0.4% in Q1, Q2

Economists expect sluggish growth in the euro area to continue in the months ahead, with output forecast to increase by 0.4% in the first and second quarters of 2016 versus the previous quarter.

 
A total increase of 1.5% for 2015 is expected by economists from the Ifo Institute (Munich), Insee (Paris) and Istat (Rome).
Developments will mainly be driven by private consumption, boosted by a recent fall in oil prices and higher income levels, the three research houses said.
Government spending is also expected to rise, especially in the euro area’s dominant economy Germany, due to the influx of refugees.
Corporate investment in the euro area will increase too, bolstered by low interest rates and rising capacity utilisation.
Based on an oil price of $35 per barrel and an exchange rate of $1.08 to the euro, inflation is forecast to edge upwards to 0.4% in the second quarter of 2016, the joint report by Ifo, Insee and Istat said.