The economic expansion of the euro area continues and shows signs of growing resilience, while monetary policy measures support domestic demand. This was stated by the ECB in its monthly bulletin, confirming the increase in estimates already announced by Mario Draghi: GDP will grow in 2017 to 2,2% from the previous 1,9%, while forecasts for 2018 and 2019, respectively, remain unchanged at 1,8% and 1,7%.
According to the Eurotower, GDP growth in real terms is mainly supported by domestic demand. Private consumption is driven by increases in employment, which in turn benefit from past labor market reforms, and by the increase in household wealth.
The recovery in investment continues to be supported by very favorable financing conditions and improvements in corporate profitability. Short-term indicators and business surveys confirm robust expansionary momentum at short horizons.
As for work, in the Eurozone “immigration made a large positive contribution to the working-age population during the recovery, mainly reflecting the influx of workers from the new member states of the European Union”. Frankfurt explains that “in turn, this has likely had a considerable effect on the workforce, particularly in Germany and Italy”.
Furthermore, the ECB notes, "the increase in the workforce during the economic recovery was driven by female participation", since among women "of working age the percentage with a tertiary education is higher than the same percentage among men".
Finally, the ECB reiterates that "in the autumn", the Governing Council will decide on the "calibration of monetary policy instruments" to be carried out in 2018. In practice, the "tapering", the progressive reduction of the monthly amount of securities purchases carried out with the quantitative easing.
At the end of the last directory, the president Mario Draghi predicted that the key points of the tapering will probably be decided at the October meeting.
