In view of analysts at Union Bank of Switzerland, Eurozone economy is not heading into recession, even after the unexpectedly prolonged weak patch.
Key Quotes
“The ECB will remain supportive. Just as the US Federal Reserve has been eager to allay fears that it will undermine growth or markets in the US, so too the ECB is signaling that it will seek to protect the economy.”
“There are pillars of strength in the Eurozone economy overall, notably the labor and housing markets.”
“Eurozone consumption should also be underpinned by relative weakness in the oil price, with Brent down from USD 87/bbl as recently as October to USD 62/bbl at present. While we expect oil prices to trend higher, the Eurozone – a large net importer of oil – should benefit from the dip.”
“We do not expect Eurozone growth to rebound to 2017’s 2.5% pace. But we still see the region avoiding recession with growth of around 1.1% this year.”
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