In view of analysts at BNP Paribas, Eurozone’s slowdown is becoming increasingly evident, especially in the German economy, which has suffered from one-off factors but also from a slowdown of exports to China.
“Capacity constraints also play a role. Business expectations continue to decline. Italy has now entered a technical recession with quarterly growth negative in the third and fourth quarter of 2018.”
“Inflation is now expected to decelerate following the past drop in the oil price, while core CPI is hardly moving. The growth slowdown also implies that the pick-up in core inflation should be slower than expected until recently. We do not expect the ECB to move rates this year.”
“We have revised growth for this year downward from 1.4% to 1.0% and for 2020 from 1.2% to 1.1%. Headline inflation has been revised downward as well: from 1.8% to 1.4% this year and from 1.5% to 1.4% next year.”
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