Euro-Area Spare Economic Capacity Is Largely Exhausted: Chart

(Bloomberg) -- The euro area’s 0.4 percent expansion in the second quarter is consistent with a very slow erosion of slack. Bloomberg Economics’ estimates suggest the region’s economy was operating only a little below its potential in the period and spare capacity will be almost exhausted in early 2019. Together with evidence of a nascent recovery in wage growth, this should keep the European Central Bank on track to bring asset purchases to an end later this year.

©2018 Bloomberg L.P.