Group 2 WenYun TU Ho Hsia Ibrahim 1 GDP Growth of Eurozone Doubledip recession 2015 Q1 Q2 Q3 Q4 Year average Growth rate of GDP 04 04 05 05 14 2 How about PMI 3 ID: 363755
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Slide1
Is the Eurozone Recovering?
Group 2
Wen-Yun
TU, Ho Hsia, Ibrahim
1Slide2
GDP Growth of Eurozone
Double-dip recession
2015
Q1
Q2
Q3
Q4
Year average
Growth rate
of GDP
0.4%
0.4%
0.5%0.5%1.4%
2Slide3
How about PMI
?
3Slide4
Is the Eurozone Recovering?
YES
4Slide5
But why?
Main reason -
the consumers are perking up and spending more
Thanks to the sharp fall in energy prices resulting from last year’s collapse in the oil priceWhether this stronger recovery can be sustained?5Slide6
There are still reasons to be optimistic (1/3)
Labor market recovery
→ Upturn in real wages
Unemployment rate is slowly reducing → Incur purchasing powerCan support consumer spending
6Slide7
There are still reasons to be optimistic (2/3)
Investment will gradually recover as uncertainty fades
Lower borrowing costs than in previous years
7Slide8
There are still reasons to be optimistic (3/3)
Fiscal squeeze will gradually lift
Tax revenues will do more of work in reducing budget deficitsGovernment spending growth should accelerate modestly
Thanks to the QE program, exporters are also being helped by the sharp depreciation in the euro8Slide9
However,
there
are still risks
ECB’s QE program will continue until at least September 2016. But capital markets play a much smaller part in the provision of finance in the euro area than in the US, which suggests that QE is likely to be less effective than in AmericaThere is still a risk that a messy Greek default or exit could throw financial markets into turmoilEuro area remains weighed down by heavy public and private debtThe situation remains heterogeneous in different countries9Slide10
Euro area
Euro-area Member States
Non-euro area Member States
Member States with an opt-outBelgiumBulgaria
Denmark
Germany
Czech Republic
United Kingdom
Ireland
Hungary
Greece
Poland
Spain
Romania
France
Sweden
Italy
Croatia
Cyprus
Luxembourg
Malta
Netherlands
Austria
Portugal
Slovenia
Slovakia
Finland
Estonia
Latvia
Lithuania
The 'euro area' is the official term for the group of EU Member States that have adopted the euro as their currency.
Euro-area Member States share the common currency and the single monetary policy conducted by the European Central Bank.
10
28.7%
1.8%
16%Slide11
Germany
v.s
. Italy
QoQ
YoYSlide12
Conclusion
The euro area may at last be achieving a recovery worthy of its name, but it is too early to declare victory.
12Slide13
Turkey
v.s
. EU-GDP Growth RateSlide14
Turkey
v
.s
. EU-Unemployment Rate