The main US banks expect a recession in the Eurozone – economic policy

Major US banks Goldman Sachs and JPMorgan Chase expect a recession in the eurozone due to headwinds from current high inflation, concerns over Russian gas supplies to Europe and rising interest rates from the European Central Bank (ECB).

Economists at Goldman think the eurozone economy will contract by 0.1% in the current third quarter, followed by -0.2% in the fourth quarter. A recession is defined as two consecutive quarters of decline. The bank expects a return to growth in 2023.

JPMorgan expects the eurozone economy to contract in the fourth quarter and also in the first quarter of next year.

Goldman also points to political unrest in Italy and a weakening global economy. According to the investment bank, the recession will be especially sensitive in Germany and Italy. The bank does not rule out that the slowdown will deepen if there is a more serious disruption of Russian gas supplies, if the US economy goes into recession and the turbulence around European sovereign debt intensifies.

Economists at Goldman think the eurozone economy will contract by 0.1% in the current third quarter, followed by -0.2% in the fourth quarter. A recession is defined as two consecutive quarters of decline. The bank expects a return to growth in 2023. JPMorgan expects the eurozone economy to contract in the fourth quarter and also in the first quarter of next year. Goldman also points to political unrest in Italy and a weakening global economy. According to the investment bank, the recession will be especially sensitive in Germany and Italy. The bank does not rule out that the slowdown will deepen if there is a more serious disruption of Russian gas supplies, if the US economy goes into recession and the turbulence around European sovereign debt intensifies.

Elliot Frost

"Pop culture maven. Analyst. Writer. Wannabe food evangelist. Organizer. Friendly internet lover. Incurable troublemaker. Entrepreneur."

Leave a Reply

Your email address will not be published.