The recent forecast of GDP growth for 2016 is promising, especially for Poland.
  • Poland: 3.6%
  • Turkey: 3.2%
  • Spain: 2.7%
  • UK: 2%
  • Germany: 1.5%
  • France: 1.3%
  • Italy: 1.1%
  • Russia: -1.3%

Why the prospects are so good? The first positive feature is the big fall in the oil price, which has helped to bring down inflation to around zero. The continental European economies are large beneficiaries of this shift as none of them is a large oil producer. Zero inflation means that real incomes are rising, with wage-earners seeing modest pay.

A second positive feature is the European Central Bank’s quantitative easing programme which has supported confidence in financial markets and the economy more generally. On its own, quantitative easing is not a magic bullet to restore growth. But as in the case of the UK and the US in 2009, it can turn round financial sentiment and boost confidence when other factors are becoming more positive.

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