Source: Bloomberg
Author: Craig Stirling, Joel Rinneby
The euro zone may be recorded in the first quarter, as the four major economies in the region have proven that it has enough toughness to get rid of the negative impact of the Russian and Ukraine War.
According to Bloomberg's survey of 31 economists, the predicted median shows that the first quarter of the euro area announced on April 28 will increase by 0.2%from the previous quarter.
Economists expect that Germany and Italy will resume growth in the first quarter after the shrinking in the previous quarter, and the French and Spanish economies will continue to grow.
Comprehensive optimism will highlight the government's assistance to enterprises and consumers, the euro zone has suffered from inflation storms and strike interference from France and Germany, breaking the prediction of decline in the region in the area.
plus the purchasing manager index shows that this positive momentum continues to this quarter, which may encourage the European Central Bank to continue to raise interest rates to suppress inflation without taking into account the cautious signal issued by the global banking industry.
The economic growth data announced this week and the April consumer prices of the three major economies may show that the European Central Bank's inflation mission has not yet been completed.
Economists predict that Germany and the European Union reconciliation of CPI will remain at 7.8%and 6.7%, respectively, and Spain may rise to 3.8%.This result will be much higher than the 2%inflation target of the European Central Bank.The overall inflation data of Italy and the euro zone will be announced in the first week of May.
"Economy's toughness means that the continuous and tight labor market will keep the core inflation rate at a higher level," Bloomberg Economic Research wrote in a report.
On Friday, economic growth data such as Austria, Belgium and Portugal will also be announced, but the German economy may become the focus.
The largest European economy and Germany are expected to suffer the worst economic recession in the region less than six months ago.Today, such a decline may have been avoided, and the German central bank officials have recently expected that the German economy will be stagnant in the first quarter. A group composed of leading institutions even expected that the German economy will return to growth.
The performance of other economies may also be better than prediction.The French Bank of France has raised its expectations for economic growth in the previous quarter this month. It is expected that the expected economic activities will offset the drag on strike and pension protests.
At the same time, officials in Italian central banks said to the parliament last week that the country's economy may resume "mild" growth.Spanish officials also said that growth in the first quarter exceeded expectations.
The growth prospects of the euro area may become more bright in the second quarter.As the output of private sector surged, the German and French purchasing manager indexes exceeded the expectations of economist.
Economic recovery may cause the European Central Bank to continue to raise interest rates on May 4th, although the exact range has not yet been determined, and may continue to raise interest rates later.
Although the President of the Italian Bank of Italy Ignazio Visco called for caution at the time of the slowdown in credit, KLAAS KNot, the Dutch central bank governor, has said that it may need to continue to raise interest rates in June and July.
