Eurozone: Weak growth to be followed by a modest pick-up – ABN AMRO

Aline Schuiling, senior economist at ABN AMRO, suggests that the eurozone economy lost significant momentum in 2018 and early indicators suggest that growth remained well below the trend rate of around 1.5% annualized in 2018Q4 and 2019Q1.

Key Quotes

“Exports and industrial production probably contracted during these two quarters as the global economy and world trade lost further momentum, while growth in France was temporarily disrupted by strikes and street protest.”

“Looking forward, we expect GDP growth to pick up somewhat after 2019Q1 and settle down at around 0.3-04% qoq, which is close to the trend growth rate. Importantly, the temporary factors that depressed growth in 2018Q3-2019Q1 will unwind.”

“Moreover, we expect modest growth in industry and exports on the back of some improvement in global trade growth in the second half of the year, and a pick-up in private consumption and government spending in the eurozone.”