Goldman Sachs was one of the banks that recently raised its Euro Zone expectations for the next year. The bank had expected that the share economy would fall into recession during the first half. The forecast now shows that the Euro Area will barely avoid a recession and grow at 0.1% in each quarter.
The dramatic drop in natural gasoline prices and China’s opening earlier than expected have led to the revision of expectations. Warm weather in recent weeks has given Europe more hope that it will not experience an energy crisis this winter. Germany was able, therefore, to replenish its natural gas reserves. France has also restored some of its nuclear power plants to allow it to once again become a net exporter.
More room for ECB?
Inflation is just above double-digits. This puts a lot of pressure on ECB to get prices in line. The ECB anticipates that inflation will remain above target for three years. However, high inflation isn’t a tenable situation, as seen in the UK. British inflation began to rise earlier than the Euro Area. This has prompted a series strikes.