Eurozone | Recovery Tracker highlights the Eurozone gloom
Our Eurozone Recovery Tracker recorded a sizeable drop over the two weeks to November 7, mainly driven by worsening conditions in health and mobility. The 1.1pts slide was the largest since April.
What you will learn:
- After a few weeks of resilience, the slump in our Recovery Tracker highlights the gloom that is affecting the eurozone economy in the last stage of the year. What’s more, some of the Tracker components for which we have data up to mid-November, such as mobility, suggest that the weakness is persisting.
- With Covid cases increasing in almost all eurozone countries, governments are introducing new restrictions that are likely to become increasingly tough.
- As a result, we intend to revise down our expectation for eurozone Q4 GDP growth in our updated forecast baseline that will be released at the start of December.
Finland’s growth forecast cut amid weak confidence and soaring inflation
We have lowered our 2022 GDP growth forecast for Finland to 1.5% from 1.7% last month, as weakening confidence further dampens the outlook. We expect inflation to peak higher with a greater passthrough to core prices, squeezing real incomes and denting consumption. Russia has accounted for almost 10% of Finland's goods trade, among the highest in Europe.Find Out More
Why we see eurozone inflation slowing sharply next year
We have revised our 2022 eurozone inflation forecasts sharply higher, to 6.0%, since the start of the Ukraine war, as energy and food prices began to soar and new supply bottlenecks emerged. That said, we still see inflation decelerating sharply to 1.3% in 2023, putting us below consensus. While we recognise significant risks to our views, inflation should slow to below 2% in H2 2023.Find Out More