Euro area: Expect Q2 GDP growth to slow to 0.3% q-o-q - Nomura

Research Team at Nomura, suggests that the underlying momentum is rising for Euro area, albeit Q2 GDP growth should slow after a strong Q1 but the ECB measures will take time to implement and evaluate, but expect further easing in H2.

Key Quotes

“The euro area business cycle moved marginally back into Expansion, though with momentum remaining close to zero it is finely balanced between Slowdown and Expansion. Concerns over global growth remain, though domestic activity should stay supported by monetary policy and slightly expansionary (aggregate) fiscal policy. Q1 GDP growth was confirmed at 0.6% q-o-q (0.55%), the highest reading since Q1 2015.

However, we continue to expect Q2 GDP growth will slow to 0.3% q-o-q. With the region facing ongoing challenges from balance-sheet adjustment, slower global growth and subdued wage growth, we retain our somewhat cautious medium-term outlook.”