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March 9 (Reuters) – Credit Suisse economists slashed their forecast for European growth on Wednesday, expecting the region to expand just 1% this year as the Ukraine crisis turbocharges commodities prices and disrupts supply chains.
The West’s moves to punish Russia for invading Ukraine have sent prices of crude oil and metals such as aluminiumand nickel soaring, threatening to derail the nascent recovery from the coronavirus pandemic. read more
The brokerage group’s latest forecast, which also factors in a hit to the Russian GDP, is much lower than its previous estimate of 2%-2.5%.
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Any fiscal response will have only a limited impact, the brokerage said.
“This time around (unlike the Eurozone crisis, COVID-19 pandemic or the Global Financial Crisis), Eurozone core inflation is above comfort levels, wage growth is back to target levels and the room for fiscal largesse post-pandemic is more limited,” Andrew Garthwaite wrote in a note.
The United States, however, seems more resilient, the economists said. U.S. economic growth will probably fall by only 50-100 basis points to still be well above trend at about 3%, Garthwaite estimated.
The European Union’s statistics office estimated in January that gross domestic product in the 19 countries sharing the euro expanded a quarterly 0.3% in October-December 2021, slowing sharply from 2.3% growth in the previous three months. read more
Garthwaite maintained his “benchmark” rating on global equities after their recent downgrade last month. read more
On Tuesday, Citigroup analysts said that the Russia-Ukraine crisis will dent global growth as oil and commodity prices soar, but the hit will be somewhat cushioned by China’s push for economic stability and the strength of the U.S. labor market. read more
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Reporting by Aniruddha Ghosh in Bengaluru; Editing by Saumyadeb Chakrabarty
Our Standards: The Thomson Reuters Trust Principles.
Register now for FREE unlimited access to Reuters.comMarch 9 (Reuters) – Credit Suisse economists slashed their forecast for European growth on Wednesday, expecting the region to expand just 1% this year as the Ukraine crisis turbocharges commodities prices and disrupts supply chains.The West’s moves to punish Russia for invading Ukraine have sent prices of crude oil and metals such as aluminiumand nickel soaring, threatening to derail the nascent recovery from the coronavirus pandemic. read more The brokerage group’s latest forecast, which also factors in a hit to the Russian GDP, is much lower than its previous estimate of 2%-2.5%.Register now for FREE unlimited access to Reuters.comAny fiscal response will have only a limited impact, the brokerage said.”This time around (unlike the Eurozone crisis, COVID-19 pandemic or the Global Financial Crisis), Eurozone core inflation is above comfort levels, wage growth is back to target levels and the room for fiscal largesse post-pandemic is more limited,” Andrew Garthwaite wrote in a note.The United States, however, seems more resilient, the economists said. U.S. economic growth will probably fall by only 50-100 basis points to still be well above trend at about 3%, Garthwaite estimated.The European Union’s statistics office estimated in January that gross domestic product in the 19 countries sharing the euro expanded a quarterly 0.3% in October-December 2021, slowing sharply from 2.3% growth in the previous three months. read more Garthwaite maintained his “benchmark” rating on global equities after their recent downgrade last month. read more On Tuesday, Citigroup analysts said that the Russia-Ukraine crisis will dent global growth as oil and commodity prices soar, but the hit will be somewhat cushioned by China’s push for economic stability and the strength of the U.S. labor market. read more Register now for FREE unlimited access to Reuters.comReporting by Aniruddha Ghosh in Bengaluru; Editing by Saumyadeb ChakrabartyOur Standards: The Thomson Reuters Trust Principles.