Eurozone, the economic expansion continues

Latest economic data confirm that Eurozone activity continues along a solid rhythm, with a good start into the second quarter, while inflation remains weak.

Looking at economic data, industrial production rose comfortably in April, leaving the overall level 2.3% above first quarter growth, continuing along an upward trend. Looking at sectors, production rose in nearly all sectors, except car production. Also suggesting solid growth are new car registration, with latest numbers rising a solid 3% last month.

Overall, we note that while business surveys point to very strong growth, actual, ‘hard’ economic data are improving, too, but to a lesser extent. But with unemployment falling, bank credit continuing to expand solidly, a slightly expansionary fiscal policy and the continuing very accommodative stance of the ECB, growth is likely to continue to improve, though overall growth rates are likely to remain modest, below 2%.

Gero Jung – Chief Economist – Mirabaud AM