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News from 2019-09-06 / KfW Research
KfW Business Cycle Compass Eurozone September 2019
Heading for a lull – euro area faces prolonged phase of weakness
Amid a contraction in overall economic output in Germany, the euro area’s largest economy, the monetary union as a whole nevertheless managed to achieve meagre growth of 0.2% on the previous quarter.
We are now more sceptical about the further outlook than in the spring. The most recent business surveys show that there is no end in sight to the industrial recession. The escalating trade conflicts and the UK government’s confrontational Brexit strategy are both taking their toll.
We therefore expect the economic weakness to continue until mid-2020 and have downgraded our growth forecast slightly to 1.0% for the current year and sharply to 0.7% for the coming year.
