Eurozone Economic Growth to Remain Weak in 2020: Reuters Poll

According to a recent Reuters poll, the slowdown in Eurozone’s economy has likely bottomed out and the chances of the economy entering a recession have faded. However, economic growth and inflation outlook continue to remain somewhat lukewarm.

The improvement in external risks such as the US-China trade war and Brexit have helped boost the market sentiment in the most recent poll, but expectations for GDP growth and pick-up in inflation in 2020 and 2021 remain tepid. Although economic growth may not weaken any further, unless the trade dispute is fully resolved, Eurozone GDP may not pick up anytime soon either.

Eurozone’s economy is expected to grow at around 1.0% in 2020, less than 2019’s expectations for a 1.2% growth. This would be the weakest pace of expansion in the Eurozone economy since 2013. In addition, inflation is also likely to stay well below ECB’s target of around 2%, at least till 2022.