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- Fitch Ratings-London: Eurozone GDP Grows, But Gives Limited Sovereign Support
Fitch Ratings-London: Eurozone GDP Grows, But Gives Limited Sovereign Support
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Loading...The increase in eurozone second quarter GDP is consistent with our view that the single currency area's short-term macroeconomic outlook has improved, but medium-term growth prospects are generally weak, Fitch Ratings says.
Seasonally adjusted GDP rose by 0.3% (qoq) and 1.2% (yoy) in the eurozone in 2Q15, Eurostat said on Friday. Our baseline forecast is for eurozone GDP growth to increase from 0.9% in 2014 to around 1.6% in 2015-2017, supported by a weaker euro, low oil prices, rising confidence, and ultra-loose monetary policy (including QE) and improved credit conditions.
Nevertheless, high debt and structural weaknesses will weigh on the recovery, and potential growth is weak compared with other major advanced economies. Eurostat said last month that aggregate eurozone government debt had risen to 92.9% of GDP at end-1Q15.
Despite the bloc's better macroeconomic short-term outlook, we have taken more negative than positive rating actions on eurozone sovereigns in recent months, with weak actual or potential growth.
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