Euroarea Narrowly Escapes Recession for Now

Euroarea Narrowly Escapes Recession for Now


Quotes from Societe Generale Cross Asset Research:
-Euroarea GDP was confirmed flat on the quarter in Q1, in line with the previous flash estimate. The breakdown by expenditure components showed few surprises compared to what could have been estimated from the various national releases.
-Consumption was flat on the quarter while investment spending fell 1.4% q/q - its fourth consecutive quarterly decline. Compared our estimates of the national components, imports were a little weaker, growing just 0.1% q/q which meant that net trade added 0.4pp to growth in Q1. This was offset by another decline in inventories.
-Looking ahead, Q1 was undoubtedly boosted by the improvement in sentiment garnered by the ECB's LTRO which allowed a partial recovery in consumer spending. This effect has clearly waned and the runes would appear to be pointing towards another significant decline in GDP in Q2.


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