Eurozone: A perfect storm of negative hits – Nordea Markets
According to analysts at Nordea Markets, Euro-area economy will lead to a slowdown towards 1% in 2019 after it suffered a series of negative shocks during 2018, which dragged growth below 2% in 2018.
“Populist parties dominated in Italian parliamentary elections and surprisingly formed a government together, bringing daily bond market moves to the same magnitude as seen during the Euro-area debt crisis on some days.”
“The trade war between the US and China escalated during the summer, and even if the Euro area was largely a bystander (it was targeted by steel and aluminium tariffs), the trade-dependent Euro-area economy suffered a lot from the weakening momentum in global trade.”
“The prospects of a hard Brexit or the UK leaving without an agreement started to really take its toll in the latter half of 2018. The extent of the damage depends a lot on how persistent the negative pressure from the shocks ends up being.”