European Economic Snapshots - April 2018

S&P Global Ratings
Written By: Jean-Michel Six, Marion Amiot, Boris Glass, Sarah Limbach and Tatiana Lysenko
S&P Global Ratings
Written By: Jean-Michel Six, Marion Amiot, Boris Glass, Sarah Limbach and Tatiana Lysenko


Strong fundamentals suggest that economic expansion in the eurozone will continue at a brisk pace. We have raised our GDP growth forecast for the region to 2.3% in 2018 and 1.9% in 2019.


We expect the German economy to grow by 2.4% this year and 1.9% in 2019. Domestic demand should remain a key driver of the economy in the next few years, supported by low unemployment and strong wage increases. Favorable economic fundamentals should support solid investment growth.


The economy is now in a more mature phase of the cycle, with growth supported by strong domestic demand and the rebound in global trade. We expect GDP to expand by 2.2% this year and 1.8% in 2019. The competitiveness of the French economy remains a major weakness, and we expect the strong euro to weigh on export performance next year, as global growth starts to decelerate.


We forecast growth of 1.5% for 2018 and 1.3% in 2019, as conditions improve further in the banking sector, leading to a stronger recovery in credit to nonfinancial corporations. Industry and exports will benefit from the solid global expansion and an improved domestic backdrop.


We expect GDP growth to remain strong but to slow down, reaching 2.7% this year and 2.3% in 2019. Household consumption and investment should remain the key drivers of growth. We also expect net exports to contribute positively to GDP growth on the back of solid global demand and past efforts on competitiveness.


We expect the Dutch economy to grow by 2.8% this year and 2.2% in 2019, thus posting solid growth but easing from the peak last year. We expect growth to be broad-based, with domestic demand and exports contributing to an impressive growth performance.


We expect the Belgian economy to grow by 1.8% this year and 1.6% in 2019. On the back of the ongoing labor market recovery, we expect consumer confidence to improve. Investment should increase substantially over the next years amid strong external and internal demand.

United Kingdom

We expect GDP growth to slow to 1.3% this year and remain moderate over the forecast horizon. Brexit risk should weigh on investment and to some extent on consumption, while not much help can be expected from net external trade, despite the much weaker sterling since the June 2016 referendum.


Stronger global demand will continue to benefit Switzerland's export-oriented economy this year, boosting exports and investment. Improved price competitiveness, thanks to the weakening of the Swiss franc over past two quarters, will continue to help. We believe the Swiss National Bank won't precede the ECB in normalizing its monetary policy, and will retain intervention in foreign exchange markets as its main policy tool.

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