- Peter Praet, ECB Executive Board Member
European Central Bank member and Bundesbank President Jens Weidmann predicted the economic recovery in the Euro zone to pick up marginally next year, but not by enough to lower unemployment. Weidmann added that Euro zone member states should further consolidate their budgets given their high debt levels. Meanwhile, ECB Executive Board Member Peter Praet said the economic outlook in the 19-nation bloc has improved in the years after the financial downturn, thanks to precipitous decline in oil prices, low interest rates and structural reforms implemented in a number of countries. Praet added that fiscal policies will be slightly expansionary, thereby contributing 0.1% to GDP growth in the Euro area in 2016 and 2017. Nevertheless, the region's main challenge will be to ensure prosperity and security. Praet emphasized the fact that real GDP in the Euro zone in the beginning of 2016 will barely return to its level of early 2008, meaning that over the last eight years the currency bloc's GDP has not grown in real terms on average. He also said that the financial sector is on a firmer footing as it was recapitalized and banking supervision was launched. Yet, pockets of fragility still exist.
Meanwhile, German factory gate prices remained negative amid continuously falling oil prices. The producer price index dropped 0.2% on month in November, translated into an annual 2.5% decline.
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