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March 05, 2019 | Brief
Is recession around the corner in Europe? Business leaders are worried. Italy is already in recession. The UK may follow in the wake of Brexit, creating knock-on effects for its trading partners in Europe. And Germany—Europe’s economic locomotive—faces its own trade-related concerns that are depressing growth. This Quick Note provides guidance about what is happening in all the major economies. It’s designed to help decision makers understand the current dynamics of the European economy and help them prepare for likely scenarios.
A recent survey of European business leaders, The Conference Board C-Suite Challenge™ 2019, shows that recession is their second major concern, just after global political instability. Are the recession fears of CEOs justified in 2019? The most likely scenario for the Euro Area sees growth slowing in 2019 to 1.5 percent, lower than initially forecasted in November, but without contracting, a view supported by our Leading Economic Indicator.[1] This puts the Euro Area outlook closer to its medium-term growth trend—estimated at around 1.4 average annual growth for the coming decade.
Aspects of Europe’s outlook are positive: though the industrial sector is already contracting, the services sector remains resilient, as indicated by the services Purchasing Managers’ Index (PMI). However, other factors are weigh
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