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In view of analysts at BNP Paribas, Eurozone’s slowdown is becoming increasingly evident, especially in the German economy, which has suffered from one-off factors but also from a slowdown of exports to China.

Key Quotes

“Capacity constraints also play a role. Business expectations continue to decline. Italy has now entered a technical recession with quarterly growth negative in the third and fourth quarter of 2018.”

“Inflation is now expected to decelerate following the past drop in the oil price, while core CPI is hardly moving. The growth slowdown also implies that the pick-up in core inflation should be slower than expected until recently. We do not expect the ECB to move rates this year.”

“We have revised growth for this year downward from 1.4% to 1.0% and for 2020 from 1.2% to 1.1%. Headline inflation has been revised downward as well: from 1.8% to 1.4% this year and from 1.5% to 1.4% next year.”