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Goldman Sachs improves eurozone estimates: no longer foresees a recession. But in Italy and Germany “weaker growth”

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The report cites “more robust year-end growth, a sharp decline in natural gas prices, and the reopening of China after the anti-COVID measures” among the reasons for the improvement in the report.

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“We still believe that height the eurozone will weak winter mainly due to the energy crisis, but we no longer see the conditions for one recession technique”. Analysts Goldman Sachs tend to be more optimistic in the report, which lists “dynamics more sustainable growth at the end of the year, natural gas prices slump and opening China after the anti-COVID measures.

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The investment bank then updates its forecast for the euro area to 0.6% growth for 2023, down from its previous estimate of a 0.1% fall. In various states, growth is slower in Germany And in Italy “which are more dependent on energy consumption for production activities, compared to France And Spainwhich have a more diversified energy sector and are relatively more intensive in the service sector.”

Job markets remain resilient with only marginal increase expected, according to investment bank unemployment rate at the Eurozone level during the winter months. Given wage growth, trade union agreements and the effects of a recovery from high headline inflation, it is assumed that wage growth accelerated significantly from 3.6% in the third quarter to almost 5% in the first quarter.

According to the report, inflation has passed its peak: this year it should average at 3.25% (compared to 4.5% in 2022), despite “continuous upward pressure on services inflation due to rising labor costs“. But it doesn’t change direction BC: Goldman Sachs – preparing for lay off up to 3200 people – Rates are still expected to rise by 50 basis points in February and March, and then cut to 25 basis points in May.

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Source: II Fatto Quotidiano

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