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1. The decline of the euro and the oil price will have positive effects
According to the economists of the three institutes, the gross domestic product (GDP) of the monetary union is expected to grow 0.2 % in the fourth quarter of 2014. In early 2015 it is expected to grow 0.3% on each of the first two quarters.
“In the first half of the year, oil prices fall should support private consumption while the appreciation of the dollar against the euro should bring the trade “ indicates the memo on the economy, which is based on the assumption of a barrel stabilizing at $ 56 and a remaining euro around $ 1.21
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Under these conditions , investment should finally leave, but moderately: + 0.2% in the first quarter and 0.3% in the second. It will benefit particularly from the end of the real estate crisis looming in Spain and France.
2. The price of oil will help to maintain low inflation
The decline in oil prices and the euro will have another consequence: it will continue to pull inflation down. “ Since the end of 2011, inflation follows a downward trend and reached a low of five in December 2014 to -0.2% annual rate” , say economists.
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According to them, prices are expected to rise by only 0.1% in the first quarter and 0.3% in the second, also sealed by the negative outlook in the production of goods. “ The acceleration of the planned activity will have a limited impact on prices” , says the note.
3. Growth does not really bring down the unemployment
“L a slight recovery expected in the first half of 2015 will have a limited impact on employment growth and wages should also grow slowly, despite the introduction of a minimum wage in Germany “, forecasters expect the three institutes.
This confirms that the unemployment curve should to be reversed before the second half of the year in France, where the rate of job seekers always rises to 10.4% of the workforce
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One consolation, however: low inflation and least restrictive fiscal policies should take a little household purchasing power
.
4. The risks are many
This relative thinning should not forget that the recovery is uneven: while growth will be relatively strong in Germany and Spain, will remain disappointing in France and Italy.
The Organisation for Economic Co-operation and Development (OECD), meanwhile, said Monday that several European economies, such as Germany, Italy and Britain, should lose the momentum.
The leading OECD indicator for the euro area remains stable (100.6) since August.
He recorded a decline of 0 1 point for Germany and Italy, 99.5 and 101.0 respectively, while it is recovering 0.1 points to 100.3 for France.
Bank of France for his part stressed Monday that a “rebound in production is expected in January,” with the business leaders surveyed.
In addition, risks are many. The authors of the note, they are both bullish and bearish. On the one hand, the fall in oil prices and the euro could support more than expected domestic and external demand. On the other, the upcoming elections in Greece and the tensions that surround could affect the rest of the euro area
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