The the Monthly Economic Bulletin, ECB noted that Eurozone growth remained “moderate” in the first two quarters of the year. “Differences across countries becoming more noticeable” in Q2. Labor markets are still improving with recent data and survey-based indicators continue to point to “positive” employment growth, with “some further moderation”.
Private consumption continues to be driven by labor market recovery. Business investment growth should be supported by accommodative financing conditions, offset partly by subdued earnings expectations. Exports growth “weakened further” in Q2. Latest economic indicators and surveys confirmed “ongoing downside risks” to growth outlook.
Meanwhile “measures of underlying inflation remained generally muted” even though “wage growth has remained robust.” Market-based measures of longer-term inflation expectations have remained at very low levels, while survey-based expectations also stand at historical lows.
