The euro area economy is no longer affected by external conditions, as the trade war is not escalating, and China's stabilization is expected to accelerate by 2020. Markets predict inflation to change from 1.1% to 1.4% in 2020 and the ECB's monetary policy to continue in 2020 and QE at least until the end of 2020 respectively.
On the contrary, the risk factors for the euro economy are:
1. China has not stabilized, which means slow growth. Also, the bad impact on the exposure of local banks will increase due to the high debt and exposure to real estate respectively.
2. Brexit for whatever reason still on the table.
3. The escalation of trade tariffs.
4. The Italian government is collapsing.
GDP ESTIMATE Y/Y:
Source: Exclusive Capital
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