
The European Central Bank (ECB) predicts that Eurozone households will postpone a significant part of their income this year. But this will lead to reduced consumption, which will slow more
economic growth. European central bank (ECB) Photo: Ralph Orlowski
European Central Bank (ECB) forecasts that Eurozone households will postpone a significant part of their income in this year. But this will lead to reduced consumption, which
will further delay economic growth.
The cause is that increasing prices and decreasing consumer confidence are forcing people to save more. But, as Piero Cipollone Piero Cipollone in an interview with Corriere della Sera noted a member of the government of the European Central Bank Piero Cipollone in the Corriere della Sera, this behavior of European consumers was unexpected for bankers.
“Most of all we were surprised by the slow recovery of consumption. We had expected faster growth, but instead of spending, families decided to save, ” he explained.
Cipollone links this to the fact that while the available resources of households have increased, the growth in wages has remained limited.
” Interest rates, rent payments, yields fund markets and the value of real assets have increased, but these funds are not liquid enough to follow directly into the ownership of people. In addition, income growth is concentrated in the more affluent populations, while households are within the housing.low income people are forced to use their savings to maintain their usual levels of life,” he said.
According to data from the European Central Bank (ECB), in the second quarter of the last year the Eurozone’s households postponed 15.7% of income. This is significantly more than than in the pandemic period, when the savings rate was 12-13%.
At the current time, as Piero Cipollone, a member of the Economy of the Economy of the Eurozone , emphasized, the most uncertainty for the economy of the Eurozone is created by the probability of a second presidentialtermofDonaldTrump.
The ECBhasalreadyconsideredthisfactor,revisingitseconomicforecasts,butthismaynotbeenough.
“Currentforecastsonlypartiallyaccount foruncertaintiesrelatedtofuturetradepolicyoftheUS.”It is difficult to assess the exacteffectbecause we don’t knowhowTrumpwill implement hisplans,” Cipollone said.
Cipollone said.