Eurozone Growth May Exceed Pre-Epidemic Level

Eurozone growth may exceed pre-epidemic level. The ECB says confidence in the euro area's recovery has risen.

The reports of the policy meeting of the ECB (European Central Bank) Governing Council held on 9-10 June 2021 have been published. In the meeting reports, it was stated that the Eurozone is expected to close the vaccination gap with the USA at the beginning of the summer, and vaccination to a large extent increased the confidence of investors in the recovery of the Eurozone. In the reports of the ECB, it was said that the reopening steps taken in the Eurozone as it emerged from the coronavirus (Covid-19) epidemic were beneficial for the economy to grow faster than analysts expected. Reports said, "Markets expect annual inflation, adjusted for the previously negative inflation risk premium, to be nearly 1.7 percent in two years, well above pre-pandemic levels." The reports published by the European Central Bank included the following statements: "Option prices show that markets are pricing in almost a quarter of the chance that Eurozone inflation will average more than 2 percent over the next five years. As a result, changes in inflation compensation have remained the sole driver of risk-free nominal interest rate developments in recent weeks." According to the bank's financial projections for June, it was stated in the reports that the budget deficit in the Eurozone is expected to be 7 percent in 2021 and to decrease to 3 percent in 2022, due to the financial support provided during the epidemic.