As European countries experience a major economic slowdown, US bank Goldman Sachs has announced an upward revision of its growth forecast for the eurozone, saying it will avoid recession in 2023.
In a note published on Tuesday 10 January 2022, economists at Goldman Sachs bank revised upwards their growth forecasts for the euro zone. Previously anticipating a 0.1% recession, the American bank now forecasts a 0.6% increase in GDP, while inflation should stabilise in 2023.
This is a surprising turnaround. Most institutions and banks have previously agreed that 2023 will be a challenging year for the Old Continent. It faces both high inflation and monetary tightening, and for its inhabitants, a loss of purchasing power and rising unemployment. While the inflation rate reached 9.2% in the euro zone in December 2022, and was still at 5% a short time ago, the bank estimates that it could fall to 3.25% by the end of 2023.
Stronger growth in France and Spain
But while recession should be avoided, economic activity in the eurozone should still be impacted in early 2023 by inflation, the energy crisis and the prolonged war in Ukraine.
Despite this, Goldman Sachs economists expect growth of 0.1% in the first quarter, and believe that France and Spain should post more sustained growth than Germany and Italy. They benefit from a more service-oriented economy and more diversified energy supplies, less dependent on Russian gas than their neighbours.
It remains to be seen whether the forecasts of the American bank Goldman Sachs will be accurate: one is never safe from a surprise, good or bad.
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