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Eurozone GDP, what next?

Jacob Deppe
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Anything the US economy can do the Eurozone economy can do, slightly better it seems. This is the best economic growth the Eurozone has seen since before the Global Financial Crisis. Contributor Jacob Deppe, Head of Trading – Infinox.

Where we go from here is anyone’s guess. But with both the US and Eurozone growing in tandem and with Asian economies on a roll, the hope is that 2018 delivers continued growth, further confidence and economic stability for the first time in a decade.

There remain issues on the horizon. Unemployment in the Eurozone, while falling, is still too high, particularly among the young. Policy divergence between the US Federal Reserve and European Central Bank (ECB) is also likely to become a growing issue by the Autumn unless the ECB acts more swiftly, but doggedly below target inflation is likely to prevent the ECB from doing so.

Whether the ECB brings an end to its monthly bond-buying programme earlier than September will depend on the first quarter economic data but, even then, it seems unlikely. We should not expect any announcement before April.

Given the growth the Eurozone has seen in the past twelve months it is ironic the British government is so determined to leave the European Union (EU). More worryingly, the strength of the Eurozone economy will continue to put European negotiators in the driving seat with the UK over Brexit.