Eurozone: Exports weighed down by softer global growth – ABN AMRO

Aline Schuiling, senior economist at ABN AMRO, suggests that their outlook for the global economy and world trade suggest that Eurozone exports will continue to contract in 2018Q4-2019Q1 and grow modestly thereafter.

Key Quotes

“Importantly, we expect policymakers to facilitate a modest recovery in world trade growth. The FOMC seems less fixed on further interest rate hikes, the ECB may keep interest rates on hold for even longer, while China’s policymakers have stepped up stimulus. Moreover, we have assumed that there will be no escalation of protectionism, although uncertainty related to protectionism will continue to linger.”

“As the trade-weighted exchange rate of the euro has been moving in a narrow range since the summer of 2017, it is not expected to have a significant impact on competitiveness or trade flows. All in all, we expect net exports to reduce overall GDP growth by around 0.3pps in 2019.”