Eurozone growth likely to face fiscal risks in 2017 - BNPP

Analysts at BNP Paribas expect Eurozone GDP growth to slow to 1.2% in 2017 from 1.6% in 2016, due to a consumption hit from higher inflation, reduced policy support and the Brexit effect.

Key Quotes

“The risks to our 2017 growth forecast are balanced. Higher oil prices and political events pose downside risks, while domestic fiscal policies could be unexpectedly favourable.”

“In terms of the fiscal stance, there is little room for looser-than-expected policy in Italy and Spain, while the risk to our assumptions lies to the upside in France and Germany.”