Eurozone : no recession expected but very slow economic growth in 2020

23rd January 2020
-IAM, News

Hugues Chevalier, Economist

According to the latest statistics available, economic growth in the Eurozone should still slowdown this year at 1% (against 1.2% expected in 2019). The ongoing bad performance of exports, and especially the German ones in the automotive sector, is the main cause of this sluggish growth. Indeed, all other components of the domestic demand are contributing to positive growth. Investment should again accelerate this year driven by interest rates which remain extremely low. Private consumption would benefit from the still decreasing unemployment rate in all countries and from the fiscal support to the households purchasing power, especially in France. Finally, government spending should play a positive factor this year. Exports stabilisation in the first place, and then, slow acceleration during the second half of the year, would enable the GDP growth to exceed 1% by the end of the year.