As the economy of the eurozone has been in the best growth for almost 20 years, it is now time to prepare for future declines. The expansion of the region has become increasingly balanced and stable, similar to its rise in 1999, said Benoit Coeure.
The ongoing recovery of the European economy is mainly due to monetary stimuli, the low rate of the euro and low world commodity prices. These are factors that will not last forever, and if we accept this, eurozone countries may be "unarmed" when the next recession comes.
Expectations for growth in the eurozone will remain in the next two years thanks to strong investment and greater convergence between countries. This forecast, including positive but still thin inflation, confirms the adequacy of the gradual normalization of the economy.
Despite the good prospects for the euro area, low inflation and over-reliance remain a major problem for the European economy.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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