The Eurozone emerged from recession in the early part of 2014, but slow growth is expected to persist amid tight lending criteria by banks and strong fiscal consolidation in a number of countries, particularly in the periphery. More recently France, Germany and Italy, the largest economies in the region, have shown signs of slowing and growth forecasts have been revised downwards.
The risk of deflation in the Eurozone persists, and remains a particular concern to the ECB, which recently announced a further round of unconventional policy stimulus. Uncertainty still surrounds the sustainability of the response of the Japanese economy to the fiscal and monetary policy stimuli implemented during the past year.