Sanele Mjikane
We expect the Spanish and Portuguese economies will continue to be clear outperformers within a struggling eurozone this year. Spain and Portugal have also reduced their long-standing, macro-financial vulnerabilities. An improved demographic outlook also means we are more optimistic about Spain and Portugal’s long-term growth than other peripheral economies.
After several years of rapid growth, we think Denmark’s pharmaceutical sector has reached an inflection point and production will settle at a new permanent high. But US President Donald Trump’s threat to impose high tariffs on Danish goods over the status of Greenland means the pharma sector is entering a more uncertain and protectionist era.
Potential US tariffs would be disruptive for the eurozone economy as a whole, but we think their inflationary impact is likely to be contained. As US imports account for around 10% of total extra-EU imports, we estimate a 10% across-the-board tariff would only increase the producers prices index by 0.5%.
Surveys are a staple of high-frequency economic indicators, but they have become less reliable in predicting hard economic data like GDP growth. This feeds macro volatility – markets still interpret surveys such as PMIs essentially as reliable growth signals. The disconnect between survey and hard data can lead to mispricing.
The EU VAT Gap 2024 report offers an extensive analysis of the value-added tax (VAT) compliance and policy gaps across the EU. As part of a larger consortium, Oxford Economics analysed the discrepancy between the theoretical VAT Total Tax Liability (VTTL) and actual revenue collected, providing insights into compliance inefficiencies and policy-induced revenue losses.
The 29th Conference of the Parties (COP29) concluded with the announcement of a new core climate finance target to assist developing nations. Although a step in the right direction, this target for funding from wealthy nations to the developing world was slammed by many as insufficient to cover the substantial costs associated with climate mitigation and adaptation efforts in the developing world.