European Commission keeps Eurozone growth forecast at 1.2% for 2020, 2021
The EC releases its winter 2020 economic forecast - 13 February 2020
- Raises German GDP forecast to 1.1% for 2020, 2021 (previously 1.0%)
- Cuts French 2020 GDP forecast to 1.1% (previously 1.3%), keeps 2021 forecast at 1.2%
- Sees tentative signs of stabilisation in manufacturing
- Signs of decline in global trade flows is bottoming out
- Coronavirus is a key downside risk to the growth outlook
- Baseline scenario sees virus peaking in Q1 with limited global spillover
- Euro are economy well placed to navigate external risks
This largely reflects the more optimistic growth outlook seen towards the end of December and in January, before the latest set of economic data from the region helped to cast some doubts upon that.
In any case, just take these forecasts with a pinch of salt for now as they could easily shift around during the course of the year.
They can act as a good baseline but because they are updated so infrequently, it is better for us traders to have our own mental revisions to the outlook depending on economic data releases over the next few months.