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Economic recovery in eurozone to continue despite risks: think tanks

Xinhua, January 12, 2016 Adjust font size:

The economic recovery in the eurozone is expected to continue at a moderate pace despite risks, three think-tanks said on Tuesday in a joint forecast report.

Real gross domestic product is estimated to increase by 1.5 percent in 2015, and to rise by 0.4 percent in both Q1 and Q2 2016 compared to the previous quarters, according to the latest forecast by Munich-based Ifo Institute, the French Insee Institute, and Italy's Istat Institute.

"Private consumption is set to continue to be the main driver behind the upturn, stimulated by a renewed drop in oil prices and higher earnings on labour," said the report, adding that expansive stimuli from fiscal policy, mainly in Germany, are expected to raise public consumption.

Meanwhile, the report also pointed out that there are also some possible risks, including an escalation of conflicts in the Middle East and even exchange rate crisis.

In addition, inflation is expected to increase moderately and reach 0.4 percent in the second quarter of 2016, based on the assumption that oil price is fixed at 35 dollar per barrel and the exchange rate between euro and dollar stabilizes at 1.08 in the coming quarters, the forecast report noted. Endit