Portugal’s economy to slow but remain a bright spot

Portugal’s economy has been a relative bright spot in the euro-zone in recent years and we think it will fare better than average again this year. Nonetheless, quarterly GDP growth looks set to slow from Q4’s stellar pace as investment eases and slower European demand weighs on exports.
Melanie Debono Europe Economist
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European Economics Update

How big a deal is the Ukraine crisis for the euro-zone?

A Russian military invasion of Ukraine would adversely affect the euro-zone economy by further disrupting the market for energy, pushing up inflation and reducing households’ real incomes. However, any economic fallout would probably be fairly small and short-lived and other factors, not least the course of the pandemic, will continue to have much more influence on the economy. In view of the wider interest, we are also sending this European Economics Update to clients of our Energy Service.

25 January 2022

European Economics Update

Rising house prices strengthen ECB hawks’ case

Euro-zone inflation would be even further above target if owner-occupied housing costs were included in the region’s headline measure. Their formal inclusion won’t take place for a few years yet, but the ECB has pledged to take them into account in the meantime. On balance, this points to slightly tighter policy. Euro-zone Drop-In: Why the ECB will be laying the groundwork for rate hikes in 2023. Join Andrew Kenningham and the Europe team for a discussion about their Q1 euro-zone Economic Outlook report on Tuesday, 1 Feb at 09:00 EST/14:00 GMT. Registration here.

25 January 2022

European Data Response

German Ifo Survey (January)

The increase in the Ifo Business Climate Index (BCI) in January provides more evidence that, after contracting in late 2021, conditions have stabilised at the start of the year. With disruption from the Omicron wave likely to ease in the coming weeks, we think German GDP will increase in Q1. Euro-zone Drop-In: Why the ECB will be laying the groundwork for rate hikes in 2023. Join Andrew Kenningham and the Europe team for a discussion about their Q1 euro-zone Economic Outlook report on Tuesday, 1 Feb at 09:00 EST/14:00 GMT. Registration here.

25 January 2022

More from Melanie Debono

European Data Response

ECB Bank Lending Survey (Q1 2021)

The Q1 ECB Bank Lending Survey revealed that the demand for bank credit fell in early 2021, and banks continued to tighten their lending standards as the pandemic dragged on and vaccine rollouts remained slow. This suggests lending growth will be weaker this year, which could hold back the recovery.

20 April 2021

Nordic & Swiss Data Response

Sweden Consumer Prices (Mar.)

Swedish inflation rose closer to the Riksbank’s 2% target in March, in line with expectations. As it should only breach the target temporarily, we continue to expect the Riksbank to keep the repo rate on hold for the foreseeable future.

14 April 2021

Nordic & Swiss Data Response

Norway Consumer Prices (Mar.)

The fact that core inflation in Norway came in above target for the fifteenth month in a row in March came as no surprise. However, it underlines that the Norges Bank is in a very different place to many of its peers, and is set to start raising interest rates later this year.

9 April 2021
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