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2021/07/02 / Erste Group Research

EZ – GDP forecasts raised

We raise our forecast for Eurozone GDP growth in 2021 from 4.0% to 4.4% and in 2022 from 3.4% to 4.1%. The decisive factor for the upward revision in 2021 is a strong positive revision of Eurozone GDP growth in 1Q21 from -0.5% q/q before to -0.3% q/q now. Our positive revision for 2022 reflects the concretization of projects under the EU recovery plan in countries such as Spain and Italy.

After the last meeting of the FOMC, the US Federal Reserve's body that decides on monetary policy, Fed Chair Powell emphasized several times that he expects a very strong labor market during the coming months. In our view, it is very likely that employment figures will rise more strongly in the coming months than they did in the spring. This would signal a strong economy, but should dampen inflation risks. After all, the more workers that re-enter the labor force, the less likely it is that there will be wage pressures that further fuel inflation.

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General information

AuthorErste Group Research
Product nameWeek ahead
Topic in focusMacro/ Fixed income
Economy in focusEurozone, United States
Currency in focusEuro, US Dollar
Sector in focus-


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