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Eurozone’s recovery is continuing, although it has been weaker than expected at the start of the year, according to analysts at BNP Paribas.

Key Quotes

“Intra-EU trade builds with domestic demand, especially corporate investment.”

“Inflation has rebounded in the wake of higher oil prices, but the core CPI trend remains subdued. Along with renewed tensions over sovereign debt spreads (Italy) this argues for the ECB to keep on buying until year end at least, and to maintain the status quo on key rates thereafter (first hike seen in Q4’19).”

France

Growth remains robust but gets back down to a less rapid pace than in 2017. Households’ consumption is supported by the jobs recovery but restrained by the upturn in inflation. Investment and exports dynamics remain favourable. Risks are on the downside. A slight rise in core inflation is appearing but remains to be confirmed.”