Forecast Gains in European Growth Momentum

John Robertson


Staff economists at the European Central Bank have become markedly more optimistic about European growth prospects over the past few months. They are forecasting a mean GDP expansion of 1.5% in 2015 increasing to 1.9% and 2.1% in the following two years. As recently as December, they had been expecting 1.0% in 2015 and 1.5% in 2016. The more optimistic tone has come from lower oil prices, a weaker currency helping competitiveness and the impact of the ECB’s monetary policies. The staff is more optimistic than the non-official consensus which is also on the rise. Overnight, a quarterly survey of 59 European forecast professionals completed in the first week of April showed a mean growth expectation of 1.4% in 2015 rising to 1.8% in 2017, increases of between 0.1 and 0.3 percentage points from a quarter earlier. Resource sector investment strategy is a constant search for growth momentum. These forecast revisions signal rising confidence about the future that has hitherto been absent. It is still not enough but is a welcome move in the right direction.

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


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