In one line: Spanish retail was on fire in December.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: No signal on the level of the neutral rate.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Spanish GDP rose by 0.8% q/q in Q4, and by 3.2% over 2024 as a whole, beating expectations.
- Growth will likely slow this year but remain stellar, such that Spain outperforms the big three, again.
- The IESI suggests Italian GDP growth will remain decent in Q1, after likely rebounding in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Political uncertain forces banks to tighten lending standards again.
Melanie Debono (Senior Eurozone Economist)Eurozone
- High gas prices and low inventories in the EU risk higher Eurozone inflation in Q2 and Q3.
- Russian gas imports will likely dwindle further; the US, Norway and Qatar can cover some of the gap…
- ...But at what price? And what will happen if Chinese or domestic US demand ramps up?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up marginally, supporting our view of a modest rebound in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up, supporting our call for faster GDP growth in early 2025, but not enough to deter an ECB rate cut next week.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Our baseline assumes a mild US tariff rate increase and therefore limited impact on EZ exports and GDP.
- If the US raises tariffs on all goods apart from EU goods, GDP could rise by twice as much this year.
- A big universal tariff increase instead could see a Eurozone recession and GDP falling by 1% or so.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Falling back but still consistent with a supra-50 EZ composite PMI.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Construction supported growth in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Weak capex and declining private consumption raise alarms for Mexico’s near-term economic outlook.
- Potential tariff threats and trade negotiations could complicate economic ties between US and Mexico.
- Ongoing reforms and budget deficits will hinder Mexico’s economic flexibility and growth prospects.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ goods trade was still a drag on growth in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Industry was a drag on EZ GDP again in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ trade rebounded in November, thanks to a bounce-back in exports to the US…
- ...This is not a clear sign of front-loading, yet, but marks a rebound from US port closures in October.
- US firms are more focused on China at the moment, which risks limited near-term upside for EZ exports.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Improvement in industry in Q4 is partly why we think GDP growth rebounded.
Melanie Debono (Senior Eurozone Economist)Eurozone
