In one line: Little sign of recovery in consumer confidence, but maybe the election changed that.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ consumers’ spending likely rose by 0.4-to-0.5% in Q4, and we look for the same in Q1.
- We still think a stabilisation in the saving rate will underpin consumption growth this year.
- Consumer confidence data point to a sticky saving rate, but are an unreliable guide.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Huge volatility under the hood of German Q4 GDP; inventories and net trade are key for H1.
- We see full-year 2025 growth of 0.5% in Germany, lower than previously but above consensus.
- EZ negotiated wage growth retreated in Q4, after the one-off-related jump in Q3; further falls are likely
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Steady; not a reflection of firms’ attitudes to election result.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up again, in line with our call for a rebound in GDP.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Further increases are likely as political uncertainty abates.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Construction boost to growth in Q4 unlikely to repeat in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Isabel Schnabel has added fuel to the idea that the ECB’s easing cycle will end soon; we agree.
- President Trump’s latest tariff threat—on cars, chips and drugs—would have a small impact on EZ GDP.
- The CDU/CSU will win the German election, but not by enough for a majority; brace for coalition talks.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up sharply, consistent with a better outlook for the EZ economy.
Melanie Debono (Senior Eurozone Economist)Eurozone
- US reciprocal tariffs, ex-VAT inclusion, would raise tariffs for 26% of EZ exports to the US…
- ...But these account for just 4% of total EU exports to the US, so the hit to EZ GDP would be small still.
- Swiss GDP growth picked up in Q4, as we expected and despite soft surveys.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still no signs of much tariff front running by US firms.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss inflation fell in January, and has been within the SNB’s target range for 20 straight months.
- The decline, and a further probable fall in February, solidifies the need for another rate cut.
- March’s cut will likely be the last in the current easing cycle, as inflation rises above SNB estimates in H2.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Only around 40% of EU Resilience & Recovery Facility cash has been disbursed to member states.
- Bureaucracy, rising costs and supply-chain issues are holding back the pace of fund absorption.
- A lot needs to be done by August 2026 to mobilise remaining funds; not everyone will get there.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Snapping back, but strength unlikely to continue.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Retail sales still rose in Q4, and further increases are likely.
Melanie Debono (Senior Eurozone Economist)Eurozone
