Eurozone growth slows to 0.2%, a four-year low as Italy stagnates. CEBR says risks of a global recession have risen.
Massive Disappointment
Eurozone 3Q GDP is a massive disappointment and don’t expect much of a recoveryhttps://t.co/HRNEZlO7Ab
— ING Economics (@ING_Economics) October 30, 2018
Annualized Growth Downgraded
As #Italy‘s growth stagnates, we revise our annual forecast for 2018 down to 1% – and even for that the onus will be on domestic demandhttps://t.co/AOxKuARvJd
— ING Economics (@ING_Economics) October 30, 2018
Note that Eurozone quarterly results are not annualized, unlike the US. The reported 0.2% in the Eurozone would equate to a report of 0.8% to 0.9% in the US.
Risks of Global Recession Rising
The Guardian has Live Coverage of Eurozone GDP.
Alastair Neame, senior economist at economics consultancy CEBR, is concerned that Germany’s economy has faltered over the summer.
CEBR Comments
“Eurozone growth of 0.2% in Q3 is the slowest rate of expansion since Q2 2014, which indicates that, amongst a range of risks, global trade worries may be having a bigger effect on business confidence than had been expected. With French GDP growth having risen to 0.4%, German growth is now under the spotlight as the currency bloc begins to stagnate.“
“Despite Germany showing some signs of labor market strength, as unemployment fell to the lowest rate since 1990 (5.1%), the economic outlook is somewhat clouded. The latest business surveys indicate that economic sentiment in Germany has waned as a result of growing global uncertainty. The Ifo business climate index fell for the second consecutive month to 102.8 points in October.”
“Cebr estimates that the risk of a global recession in the next two years has risen from a fifth a year ago to a third this autumn.”
As global business cycles mature, trade conflicts and emerging market crises could combine to tip the world into a downturn exacerbating the Eurozone’s problems.
