Eurozone Chartbook: Slippery growth seeks fiscal support


Domestic demand is faring better but spillover from weak manufacturing and exports is a concern. Considering domestic and external risks, we trim our growth forecasts.
Radhika Rao10 Oct 2019
  • High-frequency data continue to weaken
  • The European Central Bank was ahead-of-the-curve to ease policy
  • Push for fiscal policy to take a growth-supportive stance is rising
  • Impact of policy easing is evident in a weak currency, but does little for real activity
  • We trim 2019 and 2020 Eurozone growth forecasts
Photo credit: AFP Photo


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• High-frequency data continue to weaken, led by sluggish trade and manufacturing activity
• Germany is at the cusp of a technical recession in 3Q19, hurt by a tough global environment and structural weakness in key sectors
• We trim 2019 and 2020 Eurozone growth forecasts
• The European Central Bank was ahead-of-the-curve to ease policy and more is likely as external risks (Brexit, trade wars etc.) are eyed. New ECB Chief takes over in November
• Impact of policy easing is evident in a weak currency, but does little for real activity
• Push for fiscal policy to take a growth-supportive stance is rising
• Restart of asset purchases bode well for Eurozone bond yields
• EUR is expected to weaken vs the USD



To read the full report, click here to Download the PDF.


Radhika Rao

Economist – India, Thailand & Eurozone
radhikarao@dbs.com

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