European Finances
Government consumption has gathered pace over the year but this is now expected to slowdown . The spending on areas like immigration and asylum seekers has also slowed the decline in government debt in some countries although it is still falling , with the EU deficit expected to drop from 2.1 % of GDP in 2015 to just 1.6 % in 2017 .
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Gross Operating Surplus (€ Millions )
Oil prices continue to hold down inflation below zero generally , whilst corporate deleveraging has seen the corporate sector retain a higher share of primary incomes resulting in the increases seen in corporate savings . |
400
200
0
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Euro zone banks continue to repair their balance sheets , post the double dip recession of 2011-13 , but remain under pressure due to low profitability as a result of low interest rates and slow growth . Despite this there are clear signs of the ECBs accommodative monetary policy being passed through to end borrowers .
The low oil prices combined with low inflationn and interest rates in Europe have also resulted in a healthy increase in household disposable income
2,500
2,000
1,500
1,000
500
Gross Disposable Income (€ Millions )
which in turn has created a sustained rise in private consumption pushing up |
0 |
domestic demand . |
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However there are growing concerns about income inequality particularly in
France Germany Italy Portugal Spain United Kingdom Source : European Commission and OECD ( 2015 ) “ In it together ” some of the largest European economies as highlighted by a recent OECD report . This inequality , which has seen the income falling for those groups with an income below 40 % of the area ’ s median , looks likely to dampen growth .
European Automotive Report - 2016 Quarter 2 4