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Eurozone: Growth forecasts lowered for 2018Q4-2019Q1 – ABN AMRO

Nick Kounis, head of financial markets research at ABN AMRO, suggests that the latest economic data coming out of the Eurozone has made them revise their forecasts for Eurozone GDP growth for the end of 2018 and start of 2019 lower.

Key Quotes

“Ongoing contraction in Germany’s industrial sector, disruptions to growth in France due to strikes and protests, a drop in the eurozone composite PMI to just above 51 in December, and ongoing declines in the global manufacturing PMI have all signalled ongoing weakness in economic activity in the eurozone. Indeed, we have roughly halved our forecasts for GDP growth in 2018Q4 and 2019Q1 from 0.3-0.4% qoq in each quarter, to round 0.2%.”

“We expect the economy to regain some traction, albeit only to around trend rates, during the course of this year. All in all, we expect growth to be around the trend rate of 0.3-0.4% qoq in 2019Q2-Q4.”

“Our year average forecast for 2019 at 1.1% (from 1.4% previously), while our forecast for 2020 remains unchanged at 1.3%. This is below the current consensus forecast of 1.6% for this year and 1.5% for next year.”

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