Euro zone economy may be heading for 'something better'

Ardo Hansson cited better-than-expected growth and inflation as signs that the outlook could still improve later this year

Ardo Hansson

Some improvement in euro zone economic data suggests the bloc’s slowdown may be ending but it is still too early to tell, European Central Bank policymaker Ardo Hansson said in an interview published on Friday.

In it Hansson, who is the outgoing head of Estonia’s central bank, insisted there’s no need to hurry to add stimulus to the economy as “green shoots” signal that the bloc’s slowdown might finally be passing.

“I’d wait and see how these things transpire over the next few months,” he told Bloomberg. “This could now be the beginning of something better.”

Euro-area growth slowed to a crawl in the second half of 2018, blighted by global trade tension and shocks to Germany’s manufacturing sector. Hopes that the weakness would be temporary were dented early this year -- just as the ECB ended its bond-buying program -- after surveys showed sentiment crumbling. The European Commission cut its growth forecasts for the euro area this week and said it sees “pronounced” risks.

Still, an expansion of 0.4 percent in the first quarter was twice as high as the previous three months and consumer-price growth accelerated in April. Hansson is also encouraged by signs of upward wage pressure as unemployment falls, saying that gives him “fundamental confidence” that the central bank is on the right track.

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