Research
Global Data Watch
Our forecast incorporates a view that the Euro area is likely to be plagued by too little growth and too much divergence over the coming quarters. As a result, sovereign stress is likely to persist as policymakers debate, but ultimately fail to find, the right balance between growth and austerity. To be sure, Hollande’s victory in France will tilt the debate in the direction of growth-enhancing measures. But France will not reject the fiscal pact and will remain on a path to a balanced budget by 2017. Therefore, it is hard to envisage the likely result of the current debate—slowing the pace of fiscal adjustment while affirming mediumterm goals, and more aggressive use of the EIB and the EU budget—materially altering the outlook. The path ahead for Europe looks to be one of continued pain, missed budget targets, and elevated financial market stress. For this stress to remain contained within the region, the firewalls and liquidity supports put in place last year must hold. Recent
Daily Economic Briefing
Features
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Risk factors, from China to Europe and oil, are starting to lose some of their global bite as central banks are more ready than ever to prevent contagion. |
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The US labor market is set for both demand and supply to lift materially. |
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Note: Global Data Watch is updated weekly. Daily Economic Briefing is updated with a 1-day delay and is not published on Fridays. Access is available to clients only.