The impetus for economic growth in the euro zone peaked, according to most economists in a Reuters poll, who also believe that the European Central Bank (ECB) will announce the rejection of incentives before or at its June meeting.
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.
Nonetheless, more than 70% of the experts in the latest survey said they were not worried that the economic boom would end by the time the ECB began to look closely at higher interest rates.
“We believe that by the time the ECB raises rates, growth will slow. Nevertheless, we believe that the eurozone will continue to expand at a fast pace,” said Andrew Harris, an economist at Fathom.
GDP growth for the whole year is expected to average 2.3% this year and 2% next year, compared to 2.3% and 1.9% respectively in the previous survey. Quarterly growth will decline from 0.6% to 0.4% in the second quarter of 2019.