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Is the Eurozone Finally Recovering?

It seems like years since we had some genuinely positive news about the eurozone’s economic outlook.  So for many the news that the economy of the eurozone has grown by 0.4% in the first three months of the year was well over due.  The official figures show that the recovery is beginning to speed up slightly, although many forecasters had been predicting a slightly larger rise than this.

Rai Streaming estero

The trend is encouraging though with this fastest quarter growth results for a couple of years.  The growth is still slow but it’s looking sustainable and showing the possibility that it may increase.

There were other figures released before then which are of interest to eurozone economists.  Germany’s economic growth was actually below the average at 0.3%, which represents a significant slow down from the previous 0.7% growth figure for the last quarter of 2014.   The positive signs in the German economy in the areas of private consumption and investment in construction which both rose, were countered by a surprising fall in German exports.

Inflation in Germany is under control and is under the current ECB target of 2% or under.  Most European countries have fairly well controlled inflation in fact the concerns are usually around the level being too low.  An interesting economic documentary covered the risks of deflation, you can still catch the programme on the BBC iPlayer application although you’ll need to connect through a UK proxy to view it.

One of the bigger surprises was the long awaited improvement of the French recovery.  The economy also hit a two year high for growth with it rising an impressive 0.6%.  There are reports that confidence is returning to the economy with French consumer spending growing by 1.6%, although some of this will be due to the lower oil prices and the relatively weak euro rate.  Industrial production levels are also on the rise, with a four year high being recorded.

Other countries are also fairing better with Italy also recording growth figures, for the first time in several years.  Spain topped the Euro growth charts with a recorded 0.9% improvement in it’s economy, the fastest rate for eight years.

How much of this is a result of external factors like the fall in oil prices and the weak currency is difficult to tell.  There is no doubt that there are several factors which are helping plus the increased level of fiscal stimulus from the European Central Bank. There is little doubt that the majority of this growth is being fuelled by domestic demand which would be similar to the initial recover in the UK economy too.

John Usain

 

Canada’s Economy Restrained by Consumer Debt Levels

Consumer spending is restrained by a cooling housing marketplace and under performs the USA mainly due to large household debt amounts and Canada’s economic system will develop only modestly over the following two years, a Reuters survey found.

Those forecasting are virtually unchanged from January’s survey and lower than outlooks for the USA, which will be anticipated to increase 2.7% in 2014 and 3% in 2015.

Economists decreased their outlook for annualized increase in the 1st quarter of the year to 1.7% from 2.2% in January’s survey. Predictions for the remaining quarters of the year and the 1st half of next yr were virtually unchanged.

National demand, and in change, consumer outlay, has been among the significant reasons why Canada’s market recovered more rapidly in the monetary disaster than the USA.

That need was mainly a result of a housing boom, that has been fuelled by record-low borrowing expenses. Unlike in the USA, which endured a punishing house market crash, Canada’s home market has moved in a straight-line up for a long time.

But the home marketplace is now cooling-down, and a couple of market watchers remain worried about threats of an US-fashion crash. Along with high-flown home debt degrees, that’s created the Canadian customer more careful about disbursement.

Truly, Canada’s disposable home debt-to-earnings ratio reaches a close-record-high of 164.0%. By comparison, U.S. families reduced their indebtedness in the aftermath of the crash.

Economists in Wednesday’s survey anticipate Canada’s home market to continue to great.

Prognosticators anticipate that amount to fall farther to 172,000 houses next yr, compared with the 180,200 forecast three months past.

Canadian housing starts reached a yearly pace of over 200,000 in the price-fueled growth that adopted the monetary disaster.

Nevertheless, the majority are perhaps not worried about an out right crash.

“We nevertheless view that as a low chance threat now.

A substantial increase in the Bank of Canada’s key interest in the present 1.00% and a surprising fall in job would be two causes, Issa included. He does not anticipate either to occur.

Rising prices will climb up to 1.9% next yr, a contact away from the reserve bank’s 2 percent goal, the survey revealed. Nevertheless, another survey taken before this month discovered the banking isn’t likely to raise its key interest rate until the 3rd quarter of next yr.

Obviously this is just a basic economic summary and for up to date information on the Canadian economy, it’s best to check out the local TV and media sites.  To watch the main TV stations if you’re based outside Canada will require a proxy server to access them – you can find one here.

The greatest prospect for the Canadian market is an exporter resurrection, which will be anticipated to happen over the following two years as more powerful U.S. economic growth prospects to increased need for Canadian products – including electricity, automotive and mineral exports.

New governor of the Bank of England Mark Carney

A poorer Canadian dollar may also help by fostering exporters’ revenue in local currency periods. A Reuters survey ran early this month identified foreign trade strategists anticipate the money to weaken over the next 1 2 or even 3 months.