Eurozone economic growth momentum has peaked – Reuters poll

According to the latest Reuters poll of 80 economists, the Eurozone economic momentum appeared to have peaked while they believe that the ECB could drop its easing bias or at the June meeting.

Key Findings:

“The economy is expected to lose some of that momentum on the euro’s strength and inflation was expected to remain well below the central bank’s target over the next two years at least.

More than 70 percent of 51 economists who answered a separate question said the peak of growth momentum in the Eurozone was now in the rear-view mirror.

Still, over 70 percent of respondents in the latest poll said they were not concerned the economic boom would be over by the time the ECB starts to consider raising interest rates.

Full-year GDP growth was expected to average 2.3 percent this year and 2.0 percent next, compared to 2.3 percent and 1.9 percent respectively

Quarterly growth is set to slow from 0.6 percent to 0.4 percent in Q2 2019.

Over 70 percent of the economists expect that announcement to come at or before the June meeting. The remaining third expect it to happen sometime by early next year.

Still, nearly 90 percent of over 50 economists said they were confident the ECB will leave interest rates on hold for many months after it shuts its quantitative easing program as it is currently suggesting.

The central bank is expected to raise the deposit rate by 15 basis points to -0.25 percent in the second quarter next year and take it zero by end-2019. It is forecast to raise the refinancing rate once next year, in the third quarter, by 25 basis points to 0.25 percent.”