Economic stimulus programme takes effect in Euro zone

The depreciation of the euro has noticeably improved the price competitiveness of companies producing in the euro zone. 

This in itself suggests a marked increase of production in the manufacturing sector, which has already been pointing upwards slightly since mid 2014 .

Sentiment surveys create hope that the "Economic Recovery Programme" is actually having the expected effect.

The Purchasing Managers' Indices for industry surged in March by 0.9 points to 51.9. This is its highest level since May 2014.

Furthermore, the Purchasing Managers' Index for the service sector, which has already advanced considerably since November, has continued its upward trend, climbing from 53.7 to 54.3. 

COMMERZBANK says..

• Does this mean our worries about the economy in the euro zone are over? Probably not. 
  
  
• Euro depreciation and lower energy prices are fuelling growth temporarily, but we do not expect a sustained strong upswing, as the imbalances that have developed in many euro countries in past years in private debt and on the housing market still have to be corrected and this is dampening the economy.
  
  
• We remain cautious and expect an economic growth rate of only 1.1% in the euro zone in 2015. 
  
  
• The ECB is therefore set to continue its government bond buying programme as planned.