Euro-area economic boom to roll on after strong start

Bloomberg

Europe’s growth resurgence is showing little sign of losing steam yet and economists have taken notice. In Bloomberg’s monthly survey, the first of the year, respondents bumped up their 2018 outlook to 2.2 percent, close to the decade-high 2.4 percent pace estimated for 2017. The optimism is in contrast to the muted view at the start of 2017. Economists back then saw momentum slowing, but had to keep upgrading projections to keep up with the economy’s performance.
The 19-nation region has started the year with a string of positive numbers, including stronger business sentiment in Germany and France, its biggest economies. Having long cast off its “sick man” tag, the improvements have given fresh impetus to the ECB’s hawkish policy makers to push for an end to crisis-era stimulus. “This current cycle has plenty of fuel left in the tank,” said Angel Talavera, an economist at Oxford Economics in London.
The ECB has acknowledged the upturn, saying that it sees an “increasingly self-sustaining” expansion. The document also said Donald Trump’s US tax cuts could have a greater than expected impact on euro-area growth.
In Germany, the region’s biggest economy, business confidence is near a record high. The latest predictions are that Germany, France and Spain will all grow 2 percent or more this year. In Italy, where elections are one of the key risks, expansion may slow to 1.4 percent from 1.6 percent.