The eurozone economy enjoys robust growth that could be ahead of expectations in the short term, according to the regular economic bulletin of the European Central Bank (ECB).
The labor market continues to show "strong dynamics", private consumption is growing, exports are growing, both investments in construction and non-construction investments are growing, and all this indicates a reliable economic expansion ahead, the ECB said.
"In general, recent economic indicators indicate a strong growth rate in the euro area, which is projected to expand in the near future at a slightly faster pace than previously expected," the ECB newsletter says, in many respects corresponding to the assessment of the board of governors announced at the March meeting on policy issues.
"Recent events support the idea of a gradual upward trend in wage growth and the concept of a gradual increase in domestic price pressure," the ECB added. According to most economists in a Reuters poll, the momentum of economic growth in the euro area peaked.
The region's economic indicators were stable, and in 2017 gross domestic product grew by 2.5%, which is the fastest growth rate from 3% in 2007.
But a recent survey of 80 economists from February 26 to 28 showed that the economy is expected to lose some of this momentum due to the strengthening of the euro, and inflation is expected to remain well below the ECB's target level over the next two years.
More than 70% of the 51 economists who answered a separate question said that the peak of growth in the eurozone has already been passed.
“We expect annual GDP growth to decline slightly this year from very high rates in the fourth quarter. Surveys (PMIs) support this view,” said Jennifer McCownown, Europe’s chief economist at Capital Economics.
While business growth in the eurozone was the fastest for more than a decade at the beginning of the year, activity declined last month due to the appreciation of the European currency, as shown by a survey of purchasing managers in the private sector.