Market updates on July 16
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Euro zone economy will rebound in 2020
The euro zone economy is going to rebound in 2020 from this year’s deceleration, while unemployment is going to proceed with its dive, although inflation will probably stay at this year's levels and also below the ECB’s objective. That’s what the European Commission informed on Tuesday.
As the European Union's executive arm told in a quarterly economic estimate for the EU's 28 members that euro zone GDP would tack on by 1.2% in 2019, which appears to be slower than 1.3% observed in February, and quite below the 1.9% surge last year. However, it might rebound to 1.5% next year.
Unemployment in 19 countries of the euro zone is expected to head south to 7.3% in 2020 from 7.7% anticipated in 2019.
In 2020, negative domestic factors are anticipated to recede and economic activity outside the European bloc to rebound, underpinned by improving global financial conditions as well as policy stimulus in some emerging economies.
As for euro zone inflation, it’s expected to stay below the ECB's objective, although close to 2% because notwithstanding the faster surge in 2020, prices would tack on just 1.4%, which is the same outcome as in 2019.
The EU’s major bank anticipates euro zone inflation at 1.2% in 2019 and 1.5% in 2020 and has already uncovered plans to provide greater stimulus through another round of very cheap loans to financial institutions to stimulate the EU economy.
Due to the deceleration in 2019, the aggregated budget deficit of the euro zone is going to tack on to 0.9% of GDP from 0.5% in 2018, and keep to 0.9% next year.
Moreover, aggregated euro zone debt will probably decrease to 85.8% of GDP in 2019 from last year’s outcome of 87.1% and keep diving to 84.3% next year.
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