Ifo Institute sees Eurozone economic growth slowing down

FXStreet Team FXStreet

This is the press release for the Munich based Ifo research Institute:

Economic activity in the euro area is slowing down. In Q42018 and the first two quarters of 2019, the economy is only expected to grow by 0.3% respectively, according to the latest forecast by the three research institutes ifo (Munich), KOF (Zurich) and Istat (Rome). This development will mainly be due to domestic demand. The growth rate for 2018 as a whole is 1.9%. The production losses of German car manufacturers weighed on the Eurozone in Q3 2018. Industrial production in the Eurozone is expected to remain unchanged in Q4 2018, and to subsequently grow twice by just 0.2% quarter-on-quarter.

The inflation rate will reach 2.0% in the fourth quarter, which is close to the rate of just below 2.0% targeted by the European Central Bank. It will subsequently edge back down to 1.9% and 1.8% in the first two quarters of 2019 respectively. Downside risks to economic growth will increase. These risks include Brexit, escalating trade wars, the vulnerability of emerging markets and financial market volatility. The effects of the US Federal Reserve's normalisation of monetary policy on the world economy also remain difficult to assess.

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