All rights reserved. Our forecasts remain subject to downside risks; they require improving external demand, no large disruptions in Europe and resolution by late spring, so that tourism distortions fade by the summer. The European Commission released its Summer Economic forecast. Analysts at Deutsche Bank revised their GDP growth forecast for the Eurozone. The Commission forecast the euro zone’s aggregate budget deficit would rise from an historic low of 0.5% of GDP in 2018 to 0.8% this year, 0.9% in 2020 and 1.0% in 2021, unless policies change. Gross domestic product (GDP) The Coronavirus is now a new shock. We would expect countries to make full use of the standard escape clause enshrined in European rules that will provide some modest support. Overall the euro area economy will contract by 7.8% in 2020 before growing 4.2% in 2021 and 3% in 2022. The Commission said euro zone growth will slow to 1.3 percent this year from 1.9 percent in 2018, before rebounding in 2020 to 1.6 percent. ‘Sovereign Europe, hostile world: Five agendas to protect Europe’s capacity to act’, ifo Institute: Coronavirus Crisis Threatens Survival of 15 Percent of German Companies, Spain Already Has A Budget For 2021, At Last, The Global Manufacturing Cycle Continues To Expand Despite The Recent Moderation In The PMIs, Plan For A Pandemic Christmas In Spain: Closed Communities Except For Visiting Families, Uncertainty over length and intensity of disruptions globally and in Europe is high. The EU economy as a whole will contract by … As with all such advisory services, past results are never a guarantee of future results. In updated forecasts, the EU's executive Commission said it expects growth this year of 2.2 percent, which would be the highest rate for the 19-country bloc since 2007. The forecast assumes China gradually returns to work in the coming weeks and there are sporadic outbreaks outside China, triggering strong quarantining measures and further pressure on confidence. I expect far worse projections given the tigther virus restrictions so the forecasts above may well be outdated. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. The European Commission (EC) left its growth forecast for the eurozone for 2020 and 2021 unchanged at 1.2%, the EC's Winter 2020 Economic Forecast report showed on Thursday. We keep our 2021 forecast unchanged at 1.1%, assuming a permanent loss in activity. Growth would then continue at a solid pace next year, with the eurozone economy expanding by 2.0 per cent in 2019, instead of the earlier-predicted 1.9 per cent. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions. Eurozone growth could be further hampered by a sharper-than-expected slowdown in China’s economy, as Beijing tries to cushion the blows from its trade spat with the U.S., the EU said. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. ‘Leaving Schengen will be an economic mistake,’ the economy commissioner said. Latest publication. QE returns: the ECB would start as early as 4Q19 with €45bn monthly repurchase, Spain will grow 2.1% in 2019 leading Eurozone’s growth (S&P), Eurozone GDP up by 0. The European economy continues to grow at a moderate pace and there is no acceleration any time soon. The Eurozone economy grew by 12.7 percent in the three months to September 2020, recovering from a record slump of 11.8 percent seen during the second quarter and easily beating market expectations of 9.4 percent, a preliminary estimate showed. Find out how to take advantage of swings in global foreign exchange markets and see our real-time forex news analysis and reactions to central bank news, economic indicators and world events. The European Commission publishes its latest forecasts for the euro area economy - 5 November 2020. The European Central Bank (ECB) expects the eurozone economy to grow 1.1 per cent in 2020, down from 1.2 per cent in 2019, 1.8 per cent in 2018 and 2.4 per cent in 2017. Bank of America Global Research | The balance of risks to our Euro area growth forecast was tilted to the downside already amid Brexit uncertainty, US-China and US-EU trade tensions and the fragility of domestic demand resilience. The European Commission has cut its forecasts for Eurozone GDP growth in 2019 and 2020, citing global trade tensions and a slowdown in the … FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. Related Fitch Ratings Content: Economics Dashboard: Tracking Eurozone Monthly GDP Fitch Ratings-London-02 October 2020: New monthly estimates of GDP by Fitch's Economics team for the four largest eurozone economies (EZ4) suggest upside risks to the 3Q20 eurozone growth forecasts published in our September 2020 Global Economic Outlook (GEO). Founded in 2008, ForexLive.com is the premier forex trading news site offering interesting commentary, opinion and analysis for true FX trading professionals. We lower our Euro area growth forecast to 0.6% for 2020 (-40bp), on the back of lower foreign demand (global growth downgraded to 2.8%, from 3.1%), supply chain disruptions and at least temporarily lower domestic demand from local virus hot-spots. The commission adds that the technical assumption for the forecasts is that there will be no trade deal between the EU and UK once the Brexit transition period ends on 31 December. The economy is seen expanding 4.8% in 2021, which is down 0.5 percentage points from last month’s forecast. This indicator is measured in growth rates compared to previous year. EUROZONE growth forecast has slipped, falling from nearly 2.0 percent this year to an expected 1.6 percent in 2020, according to new figures from … Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Summer 2018 Interim Economic Forecast: Resilient growth amid increased uncertainty Euro area growth is expected be close to zero in 1H20 (with negative quarters in Italy and Germany part of our base case). © Consejeros del Capital Social CDC Group. In its quarterly forecast, the EU executive blamed the downward trend on the slowdown in China and US protectionism that has crimped global confidence. We provide real-time forex news and analysis at the highest level while making it accessible for less-experienced traders. This page has economic forecasts for Euro Area including a long-term outlook for the next decades, plus medium-term expectations for the next four quarters and short-term market predictions for the next release affecting the Euro Area economy. 2Q GDP growth (late 1Q, early 2Q monthly data) will be more impacted, before growth resumes in 2H again including a small bounce-back towards year-end, in our view. We lower our Euro area growth forecast to 0.6% for 2020 (-40bp), on the back of lower foreign demand (global growth downgraded to 2.8%, from 3.1%), supply chain disruptions and at least temporarily lower domestic demand from local virus hot-spots. Growth in the euro area is forecast to ease from a 10-year high of 2.4% in 2017 to 2.1% in 2018 before moderating further to 1.9% in 2019 and 1.7% in 2020. The European Commission sharply cut its eurozone growth forecast for 2019 on Thursday as an unexpected slowdown in Germany and protests in France weigh on the economy in Europe. Forecast is based on an assessment of the economic climate in individual countries and the world economy, using a combination of model-based analyses and expert judgement. All the biggest trading floors in the world have screens locked on ForexLive™. The European Commission has raised its 2017 growth forecast for the eurozone and expects the 19-country bloc to grow by 2.2 percent this year — its fastest pace in a decade. We'll assume you're ok with this, but you can opt-out if you wish. July 10, 2019: The European Commission on Wednesday slightly lowered its 2020 eurozone growth forecast, due to global trade tensions and political uncertainties, in particular the risk of a no deal Brexit. We assume that 2H growth will be supported by some small-scale fiscal easing. Despite a second half recovery, there will be some permanent damage. The Commission also raised its eurozone growth forecast for next … That said, further restrictions, global trade tensions, a no-deal Brexit and rising levels of public debt pose downside risks. In its previous forecast in the spring, it had penciled in growth of 1.7 percent. The Eurozone single currency bloc is expected to feel the brunt of the slump with GDP growth predicted to be lower than forecast in the summer. In the particular case of Germany we think a front-loading of the partial solidarity surcharge abolition to mid-year (from Jan-21) is now very likely. There is … Adding that the forecasts are surrounded by 'exceptional uncertainty'. It compares with the EC's May forecast of a 7.7% slump and 6.3% growth. They see now a contraction in 2020 of -8.6% (previously -12%). But even that, we think, should not be the base case at this juncture. Subscribe to our Daily News Wraps It said even the lower estimate was vulnerable to large uncertainty from slowing growth in China and weakening global trade. Given recent virus developments, the changes to the projections are very much expected but these are still relatively optimistic in my view. 3 % with Greece growing by 0.8%. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. The forecast for euro area GDP growth in 2019 remains unchanged at 1.2%, while the forecast for 2020 has been lowered slightly to 1.4% following the more moderate pace expected in the rest of this year (spring forecast: 1.5%). Brussels, May 7: The European Commission cut its eurozone growth forecast for 2019 on Tuesday, with overspending by populist-run Italy again a concern. Anyway, this serves as an anecdote that if the virus situation doesn't get any better in the coming year, we are going to keep rolling back this downgrade update every quarter. The EU also cut Italy's growth rate to a five-year low, a situation that risks reopening bitter differences between Brussels and Rome about the government's spending plans this year. By continuing to browse our site you agree to our use of, The battle for working-class votes will reverse the secular decline in inflation, Trade crypto, stocks, and more with $100 reward! Black Friday offer, The next shoe to drop in the post-covid trade is in FX, US major indices close at record highs led by the S&P index, USDCAD reaches in the next downside target at the October 2018 low, FX option expiries for Friday December 4 at the 10am NY cut, FX option expiries for Thursday December 3 at the 10am NY cut, FX option expiries for Wednesday December 02 at the 10am NY cut, FX option expiries for Tuesday December 1 at the 10am NY cut, December seasonals: Watch out in commodities, crypto, bonds and bitcoin, Atlanta Fed GDPNow tracker for 4Q rises slightly to 11.2% from 11.1% on Dec 1, Fed's Kashkari: Jobs report shows many Americans have given up hope, Feds Evans: Most important stimulus for economy is fiscal public health safety, Fed's Evans: US economy came back more quickly than thought, BOE's Tenreyro: The evidence is that negative rates have helped economies, Eurozone 2020 GDP forecast -7.8% (previously -8.7%), Eurozone 2021 GDP forecast +4.2% (previously +6.1%), Expects Eurozone economy to contract by 0.1% q/q in Q4. This is part of a global revision. The statistic shows the growth of the real gross domestic product (GDP) in the European Union and the Euro area from 2009 to 2019, with projections up until 2021. Brussels now expects gross domestic product (GDP) in the single currency bloc to increase by 1.4 percent in 2020, down from 1.5 percent in its previous forecast in May. Get the latest breaking foreign exchange trade news and current updates from active traders daily. This website uses cookies to improve your experience. Eurozone Economic Growth The economy should recover most of its lost output next year, supported by EU funding, ultra-loose monetary and fiscal stances, and strengthening external demand as the global economy reopens. Leverage creates additional risk and loss exposure. At EURUSD around 1.08 in spite of three Fed cuts being priced and increasing ECB talk of “side effects”, we find another depo rate cut counter-intuitive. ForexLive.com blog posts feature leading edge technical analysis charting tips, forex analysis, and currency pair trading tutorials. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. Markets are pricing a 10bp depo rate cut – we still think the bar for this is high. HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. The European Commission (EC) has slashed its growth forecast for the 19 countries that use the euro. LONDON (AP) — The eurozone economy will grow this year at its fastest rate in a decade following a run of upbeat news largely linked to a reduction in uncertainty following a series of elections, the European Union said Thursday. Eurozone GDP growth forecasts 'substantially' upgraded by ECB as Brexit Britain set to struggle. A stronger fiscal response would catch us as an “upward” surprise and could strengthen the very small and partial bounce-back in 4Q20. We cannot rule out the ECB reacting with a small increase in monthly purchases to EUR30bn by the summer (mostly through more private sector purchases), if disruptions go beyond our expectations. We forecast 1Q global growth of less than 1% qoq saar and we cut full year growth from 3.1% to 2.8%. The GDP forecast for the EU remains unchanged at 1.4% in 2019 and 1.6% in 2020. Our assumption on the fiscal modus operandi, therefore, remains: further deterioration first, partial and late repair second. None of the blogs or other sources of information is to be considered as constituting a track record. But it can facilitate a quicker return to demand growth when disruptions fade and hence try to limit the permanent damage to activity levels. OECD Economic Outlook Publication (2020) Indicators. As expected, European Central Bank staff on Thursday slashed their forecast for 2019 gross domestic product growth in the eurozone to 1.1% from a previous estimate of 1.7%. Subscribe to our Newsletter. We keep our 2021 forecast unchanged at 1.1%, assuming a permanent loss in activity. ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Neither fiscal nor monetary easing can probably avoid 1H weakness, which is (to a very large extent) supply side-driven. The “automatic stabiliser” embedded in forward guidance means low rates for even longer, and that may make corrective action to avoid negative effects of negative deposit rates on bank lending even more necessary – we stick to our call for more generous tiering in 2H20. The ECB probably cannot be ‘the game in town’. The eurozone actually grew faster than the US in the last quarter - at 12.7%, versus 7.4%. In 2022, GDP is seen increasing 3.1%.

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