Barclays Capital Research has revised its growth projections for the euro area to take stock of the ongoing strength of the economic expansion.
"We now expect euro area GDP to grow by 2.5% (up from 2.2%) in 2018, after 2.4% in 2017, the best performance since 2007…
We adjust our call for ECB policy to take into account these revisions as well as the latest information about the debate within the GC.We expect: 1) an adjustment of the forward guidance on rates to be decided at the April meeting, focussing on the future path for rates and disentangling the exit from negative rates and the hiking cycle; 2) the end of the asset purchase programme in September, although re-investment of maturing securities would likely continue at least until 2020; and 3) a first increase in the depo rate by 20bp in December, followed by another increase in March 2019 that would leave the policy rate at zero at least until end 2019," Barclays projects.
Source: Barclays ResearchOriginal Article
