Eurozone: What is kick-starting the economy? - Natixis

The recovery in the euro-zone economy seems to be down to exogenous causes (oil prices), countercyclical policies (fiscal and monetary) and a structural improvement (high corporate profitability), suggests Patrick Artus, Analysts at Natixis.

Key Quotes

“The euro-zone economy is clearly accelerating and could grow at a rate of 2% in 2017. Fundamentally, what can this acceleration in the euro-zone economy be attributed to?

• The improvement in the global economy?
• The end of restrictive fiscal policies?
• The low level of interest rates and their effect on credit and real estate?
• Increased corporate profitability and investment as a result?
• Newfound job creation capacity?”

“We have found it can be attributed to: 

- The end of structural fiscal deficit reduction;

- The fall in oil prices (until mid-2016);

- The upturn in housing investment on the back of very low interest rates;

- Increased corporate profitability.”

“At play, we therefore see exogenous causes (oil prices), countercyclical policies (fiscal and monetary) and a structural improvement (high corporate profitability).”