Back
13 May 2015
EZ GDP growth strengthens but less than expected - Danske
FXStreet (Guatemala) - Analysts at Danske Bank noted the EZ GDP Q1 numbers improving.
Key Quotes:
"Euro area GDP growth improved slightly to 0.4% q/q in Q1 in line with consensus but below our forecast."
"Compared to Q4 14, when the economy expanded 0.3% q/q, the higher GDP growth is mainly the result of stronger domestic demand. Especially private consumption strengthened further in Q1, as it was supported by the very low oil price that lifted consumers’ purchasing power."
"Compared to our expectations, the disappointment in GDP growth is due to a smaller contribution from net exports, because of the slowdown in the US and China in Q1. Despite the weakness in net exports, GDP growth in the euro area was higher than in both the US and the UK in Q1."
"Looking into Q2, we expect weaker growth in private consumption as the higher oil price becomes a headwind. On the other hand, net exports should have a larger positive contribution as we expect foreign demand to pick up as the US and China are set to recover. The slowdown in private consumption is expected to dominate and we look for weaker growth in Q2 compared to Q1."
"Nevertheless, the economy is still supported by 1) the weaker effective euro, 2) cheaper and more accessible bank lending, 3) fading uncertainty and 4) less fiscal headwind. Hence, growth should remain positive and strengthen again in H2."
Key Quotes:
"Euro area GDP growth improved slightly to 0.4% q/q in Q1 in line with consensus but below our forecast."
"Compared to Q4 14, when the economy expanded 0.3% q/q, the higher GDP growth is mainly the result of stronger domestic demand. Especially private consumption strengthened further in Q1, as it was supported by the very low oil price that lifted consumers’ purchasing power."
"Compared to our expectations, the disappointment in GDP growth is due to a smaller contribution from net exports, because of the slowdown in the US and China in Q1. Despite the weakness in net exports, GDP growth in the euro area was higher than in both the US and the UK in Q1."
"Looking into Q2, we expect weaker growth in private consumption as the higher oil price becomes a headwind. On the other hand, net exports should have a larger positive contribution as we expect foreign demand to pick up as the US and China are set to recover. The slowdown in private consumption is expected to dominate and we look for weaker growth in Q2 compared to Q1."
"Nevertheless, the economy is still supported by 1) the weaker effective euro, 2) cheaper and more accessible bank lending, 3) fading uncertainty and 4) less fiscal headwind. Hence, growth should remain positive and strengthen again in H2."