Growth to disappoint as consumer recovery slows

While the euro-zone economy ended last year with some momentum, expectations of a further acceleration in growth in 2016 will be disappointed. The boost to consumer spending from the decline in oil prices and inflation will fade, while export growth is also likely to slow as the effect of the depreciation of the euro diminishes and the external environment remains fragile. Against this background, the ECB is likely to have to extend its monetary policy support again this year, forcing other European central banks to take action to prevent further damaging rises in their currencies.