Analysts at Nordea Markets suggest that the outlook for the Euro area real economy is mixed and there are signs that the manufacturing sector is in for a slowdown, not least in Germany, partly due to a loss of momentum in the global economy.
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“Domestic demand, on the other hand, seems to hold up well and is expected to do so also going forward. Both household consumption and investments are still supported by expansionary monetary policy and to some extent also fiscal policy.”
“Although we revise down our GDP forecast for the Euro area, the economy is still expected to grow above its potential rate at 2.0% in 2018, 1.8% in 2019 and 1.6% in 2020. Resource utilisation will thereby continue to increase, supporting higher wage growth and consumer price inflation. We indeed notice that robust economic development has started to finally show up in the Euro-area wage and price trends.”
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