Vítor Constâncio, Philipp Hartmann, Peter McAdam, 23 August 2017

The European Central Bank’s 2017 Sintra Forum on Central Banking built a bridge from the currently strengthening recovery in Europe to longer-term growth issues for, and structural change in, advanced economies. In this column the organisers highlight some of the main points from the discussions, including what the sources of weak productivity and investment are and what type of economic polarisation tendencies the new growth model seems to be associated with.

Marco Buti, José Leandro, Katia Berti, 12 May 2017

As the recovery in the Eurozone approaches its fifth year, this column presents the latest economic forecast from the European Commission, which projects a continuation of the recovery at a steady pace (1.7% in 2017 and 1.8% in 2018). Nevertheless, over the next two years, wage growth is expected to remain constrained, the investment gap is expected to persist, the current account surplus is forecast to remain high, and core inflation to stay subdued. This suggests that there is still scope for higher growth without triggering inflationary pressures, and the Spring forecast shows that maintaining the current supportive macroeconomic policy environment is the right approach, while implementing comprehensive and productivity-enhancing structural reforms. The main immediate priority should be cleaning up the banking sector.

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