Eurozone Will See Slower Economic Growth
Economic activity in the euro area is slowing down. In Q42018 and the first two quarters of 2019, the economy is only expected to grow by 0.3 percent respectively, according to the latest forecast by the three research institutes ifo (Munich), KOF (Zurich) and Istat (Rome).
This development will mainly be due to domestic demand. The growth rate for 2018 as a whole is 1.9 percent. The production losses of German car manufacturers weighed on the Eurozone in Q3 2018. Industrial production in the Eurozone is expected to remain unchanged in Q4 2018, and to subsequently grow twice by just 0.2 percent quarter-on-quarter.
In the fourth quarter, the inflation rate will be close to the European Central Bank's inflation target of 2.0 percent. It will subsequently edge back down to 1.9 per cent and 1.8 per cent in the first two quarters of 2019 respectively. Downside risks to economic growth will increase. These risks include Brexit, escalating trade wars, the vulnerability of emerging markets and financial market volatility. The effects of the US Federal Reserve's normalisation of monetary policy on the world economy also remain difficult to assess.
Eurozone Economic Outlook
This quarterly publication is prepared jointly by the German external page ifo Institute, the KOF Swiss Economic Institute, and the Italian external page Istat Institute. The forecast results are based on consensus estimates building on common macroeconomic forecast methods by the three institutes. Details and graphs can be found in the right column.
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