The latest Ernst & Young forecast for the eurozone shows an almost doubling of growth in 2015, to 1.5 percent from 0.9 percent in 2014, mainly due to slumping oil prices and the recently announced “Quantitative Easing” (QE). A figure of 1.8 percent is forecast for 2016.
In terms of Greece, the report states that “…after six years of recession, 2014 was a turning point for Greece, with the economy finally returning to growth, estimated at 0.8%. The recovery to date has largely been built on consumption and net trade.
“While recent political uncertainty and tense negotiations with the EU will have dented activity, the extension of the existing adjustment program should provide a window for a longer-term agreement. As a result, we forecast that GDP growth will pick up slowly, to 1.7% this year and 2.4% in 2016.
“In the short term, low oil prices mean continued deflation. Consumer prices fell 2.8% on the year in January. This is likely to boost real wages this year if growth in nominal earnings can be sustained.
“Improved Greek competitiveness is enabling exports to outpace imports. As a result, net trade has made a significant contribution to growth, adding 1.3 percentage points to GDP in 2014, and we expect a similar contribution in 2015.”