Poor Eurozone GDP data suggests recovery stalled - ING

FXStreet (Łódź) - Peter Vanden Houte, Chief Economist at ING, suggests that despite the disappointing Eurozone GDP numbers for the second quarter of the year the ECB will probably remain on hold until teh end of the year.

Key quotes

"According to Eurostat’s flash estimate, Eurozone GDP showed 0.0% growth in the second quarter, down from 0.2% in the first quarter."

"The weak GDP figures are at odds with sentiment indicators, which had been pointing to somewhat stronger 2Q GDP growth."

"Does this mean that growth is bound to accelerate again in the second half of the year? That would have been our expectation if it weren’t for the geopolitical tensions that have injected uncertainty into the outlook."

"It now looks very likely that GDP growth for the whole of 2014 will remain below 1.0%."

"The bottom line is that the ECB will have to maintain an extremely accommodative monetary policy, even as the US starts to tighten policy in 2015."

"Big decisions on more unconventional policy measures will have to await 2015."