The eurozone is heading for the good times according to Goldies analyst Huw Pill.
He says that a 10% drop in oil lowers CPI by 0.2% in the short term and raises GDP by 0.3% over a two year period
As such he’s raising his forecast for GDP to 1.2% from 0.9% for 2015 and 1.6% vs 1.4% for 2016. CPI has been cut to -0.5% vs -0.1% for 2015 and will only turn positive in 2016.
Europe is going to need to start seeing the impact of lower energy/commodity prices playing out in the numbers or it’s going to be a big flashing red warning sign that even with a potential economic boost of lower prices, Europe just hasn’t got the activity to make it count. The big problem is that it can take quite a while to start seeing those effects filtering through.
