Eurozone economic growth recovers to pre-crisis level

European Central Bank (ECB) President Mario Draghi said Friday 2016 marked the first year when gross domestic product (GDP) in the eurozone recovered to above its pre-crisis level since 2008, reports Xinhua.

The temporary rebound within 2010 and 2011 was essentially a jobless recovery whereas current recovery had reduced the unemployment rate to 10 per cent at the current stage in the euro area, with labour participation rate expanding, Draghi said.

Domestic demand has replaced foreign demand as the main driver of growth in the single currency area consisting of 19 European Union countries.

"Over the past two years, domestic demand has on average added more than a percentage point to GDP growth, supported by very accommodative financing conditions," the head of ECB added.

He said economic recovery requires support from a strong banking sector, which has become more robust in terms of capital, leverage, funding and risk-taking under the global regulatory agenda steered by the G20.

"So now is the time to finalise the regulatory agenda and enter a period of stability. The focus should be on implementation, not on new design," Draghi said.

Regarding potential risks weighing on recovery in the euro area, the ECB chief warned of the remaining prevalent geopolitical risks, the profitability of euro area banks, the weak inflation dynamics as well as the dependence of the economic recovery on easy monetary policy.