Although external sector was the main driver of growth for the EU in the past years, we now expect net exports to take a back seat to consumer spending as the main driver of the economic growth in 2015.
Confidence among EU consumers was set to fall in H2 2014. People were worrying about the lingering regional military conflicts as those in Ukraine and Syria. At the same time, many business leaders warn that the weak sales outlook is demotivating them from investing in the EU region.
Germany plays a key role in the region and the German government leads many Eurozone policy makers. Starting from October 2014, the country again witnesses the strong month-on-month growth in spending resulting from very low unemployment and increasing income expectations, compared to other countries. Growing consumption in Germany expects to boost also the growth of its important trading partners as Poland, the Czech Republic, Romania etc. However, this over-reliance on Germany is starting to become an issue for some EU countries. The worsening of situation in Germany means reducing in exports for those countries and consequently leads to slowdown of their economies. That is why growing private consumption together with improving labor conditions are becoming the key growth driver also in the CEE region.