All available indicators of retail activity are moving in the direction of improving household spending. |
Barring major surprises on the energy and food price front, we expect headline inflation to slide gradually towards 2% during the spring. |
Italy needs radical reform to cut its unit labor costs and regain competitiveness, but that can be a very painful process. |
There is a risk (to the recovery from the VAT hike) but since we are seeing stronger growth then there is a bigger chance that the German economy can actually withstand it. |
What we have seen over time is a gradual pickup in underlying growth momentum. The strength we were seeing earlier in the year in the export side has started to spill over to investment. |