European Economics

Investing in the future
The euro area has reached an inflection point. Euro area Q2 GDP grew by 0.3%, after six quarters of recession, driven by a solid pick-up in domestic demand (private consumption in particular) in the core and an attenuation of the domestic demand recession in peripheral Europe. For once, the euro area was not a drag on global activity – as also suggested by some moderation in net external trade dynamics.

Investors’ focus may now begin turning to how the euro area could surprise to the upside. That might be premature – and our central scenario is one of muted recovery in the coming quarters – but optimists should look into investment dynamics, in our view. Investment, we believe, could provide a key source of upside risk. There are several reasons for this: Read the full report

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