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Economists at ABN Amro have revised down their global economic growth forecasts. They expect a deeper economic contraction in the near term, but also a longer delay before a strong and durable rebound takes shape.

Key quotes

“After a sharp Q3 bounce, economic growth will be more subdued in the months thereafter.”

“We have downgraded our Q1 forecast on the back of the macro data published for January-February. We now expect a negative annual growth rate in Q1, followed by a sharp recovery in Q2 extending into Q3.”

We assume initially 1.2% GDP of discretionary fiscal stimulus in the eurozone, and around 2.5% GDP in the US, though more may follow at a later point.

“We think the Fed is now done in terms of the immediate future while the ECB does have more work to do in the near term. We think that at the April Governing Council meeting, it will cut the deposit rate by 10bp to -0.6%.”

“We expect global economic growth to durably move above trend during the course of  2021.”