Deutsche Bank revises eurozone GDP outlook for the year
The German economy is doing better than expected, while the UK economy is also going through a cyclical recovery.
- However, the report suggests, this is likely to be due more to cyclical than structural reasons, with the bank's 2025 forecasts for the eurozone remaining the same at 1.5%.
The risk is two ECB interest rate cuts, not the hoped-for three
"We now describe the landing zone as 2% to 2.5%. Either way, we see market pricing in 2025 as too hawkish. Declining inflation, fiscal tightening, and trade and geopolitical uncertainty all lean towards a larger easing of monetary policy."
Looking at China, the bank in April lifted the country's growth forecasts to 5.2%, driven mainly by more government spending and exports looking up. However, for the next year, Chinese growth is expected to drop to 4.5%, as the housing market bows down to supply shooting up.
Euro Zone Bond Yields Slide Amid Mounting Economic Concerns
The broader implications of these bond yield movements signal a cautious stance by central bankers amid economic uncertainties and labor market concerns. While the ECB is expected to cut rates, policymakers may delay actions due to unpredictable growth and employment dynamics. Additionally, the resilience of Italian bonds despite economic headwinds and the yield spread between French and German bonds following France's debt downgrade are crucial indicators of ongoing regional economic challenges. Ultimately, these developments reflect a complex and evolving global economic landscape.
Wealth of nations: Gap between rich and poor in Europe widens
Wealth inequality between countries across Europe is very strong. In the EU, the difference in wealth per adult between the countries with the highest and lowest levels exceeds a factor of ten.
Inequality has emerged as a major concern among EU citizens. According to the 2021 Eurobarometer survey, ensuring equality of opportunities was ranked as the top priority for the EU's economic and social advancement. The most pressing issues for citizens are equal opportunities and access to the labour market, fair working conditions, and access to quality health care.
Credit Suisse and UBS's Global Wealth Report 2023 showed that wealth inequality is apparent not only within countries but also between the nations across Europe.
A Resilient Global Economy Masks Growing Debt and Inequality
The world appears to have dodged a downturn, but wars and economic nationalism are leaving many countries worse off.
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