In the 2024 IP growthL of the eurozone will be by 0.8%in 2025 by 1.2% in 2025: he appreciates it S&P Global Ratings underlining that the Germany is late compared to other Eurozone countries, while Spain will continue to record superior performances. The rating agency lowered its inflation estimates for 2025 due to a more pronounced decline in energy prices, bringing it to 2.4% versus 2.5% previously indicated.
GDP growth at +0.8% in 2024
In his outlook for the Eurozone in 2025, S&P Global explained that a long period of stability in macroeconomic forecasts may be coming to an end. “The new leaders of the United States, the European Union and Germany could indeed make decisions early next year on tariffs, defense and general spending that could reshape the economic outlook,” underlined Sylvain Broyer, chief European economist at S&P Global.
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S&P also expects the ECB to cut rates more quickly than previously expected, due to persistent weakness in confidence and better visibility on the trajectory of disinflation. “That said, S&P does not expect the size of the cuts to exceed its estimates to date.
S&P now expects the main policy rate to reach 2.5% before summer 2025, compared to the previous forecast, which looked to September 2025,” he underlined.
Rates, Schnabel “hawk” freezes the markets
Meanwhile, Isabel Schnabel freezes the markets: the member of the executive committee of Central Bank, believes, in fact, cthat there is little room for further rate cuts by the European Central Bank. “Given the inflation outlook, I believe we can gradually move towards neutrality if incoming data continues to confirm our baseline,” Schnabel said, according to Bloomberg.
“I would caution against going too far into accommodative territory.” The ECB representative estimates neutrality, which cannot be measured precisely, at 2%-3%. With the rate at 3.25% Schnabel said that “we may not be that far away.”
