EURO ZONE

摘要

Despite mounting external risks from the US-Chinatrade war, along with greater political risks from within, stemming from ongoing Brexit uncertainty and the rise of populism evident in European Parliament elections, Euro zone forecasts have held broadly steady this month. Alongside a dip in the Euro zone unemployment rate to adecade low of 7.6% in April, the breakdown of German Q1 GDP was a relief, pointing to a relatively broadbased recovery, with gains in exports and consumer spending boding well for future growth prospects. The ECB also expressed optimism at its June 6 meeting, upgrading its 2019 GDP expectations one tick to 1.2%. It did, however, lower its 2020 GDP forecast and pushed back expectations of a rate hike to mid-2020 at the earliest, as it joins the US Fed in being troubled by souring global sentiment. A slump in Euro zone inflation from 1.7% (y-o-y) in April to 1.2% in May took policymakers by surprise, and raises the risk of the 'just below' 2% CPI target being missed.