| Eurozone growth expected to maintain status quo |
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The Eurozone economy is not expected to create ripples nor is it going to plummet considerably. It will continue to grow modestly at around 0.3-0.4 per cent per quarter in the near future. This was the estimate arrived at by the major economic institutes such as Ifo institute of Germany, Insee institute of France and Isae institute of Italy.
They all projected the GDP growth to be 0.4 per cent in the third quarter, 0.3 per cent in the fourth quarter and 0.4 per cent in the first quarter of next year. The Euro zone GDP had registered a growth of 0.3 per cent in the second quarter. This would mean that the estimate for full year growth in GDP would be 1.3 per cent. The estimates made only slight corrections to the previous projections. The European Commission was projecting a growth of 0.2-0.6 per cent in the third quarter and 0.4-0.8 per cent in the fourth quarter.
The European Central Bank (ECB), for now, has left its interest rates unchanged at 2% for more than two years even as some of Union’s largest economies were reeling and showing signs of recession. ECB president Jean-Claude Trichet feels that rates in Europe are at the right level. He however cautioned that inflation might be a problem, albeit for a short-term.
European Union’s statistical office, on the other hand, projected economic growth in third and fourth quarters. Though a report that showed that growth dipped to 0.3% in the second quarter from 0.4% in the first, the European Commission is confident that growth will accelerate by this year-end. It also expects improved demand and output.
Some analysts felt that the inflation rates would drop which would allow ECB to keep the rates unchanged which would accelerate economic growth.
According to Eurostat, Lithuania, Latvia and Estonia reported Europe's highest growth rate for the second quarter at 3.3 percent 3.2 percent and 2.8 percent respectively. While Greek, Finnish, and Polish economies slowed down a little. It also mentioned that while private consumption grew by very little, there are promising signs of healthy growth in exports and imports.
Greece registered highest increase in export in European Union at 7.7%, while Slovakia had highest import rates at 7.3%.
Posted
on : Sat, 15 Oct 2005 00:35 GMT | General News
By : Pippa Fielding
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