EY Eurozone Forecast
& Outlook for financial services

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Welcome to the EY Eurozone Forecast & Outlook for financial services.

Key highlights: Autumn 2012

Since our Summer 2012 Eurozone Forecast policy-makers have taken important steps towards deeper integration. The ECB has introduced a bond purchase program allowing the European Stability Mechanism (ESM) to inject money directly into banks, which will ease the strains on the economy. However, policy uncertainty is still clouding the economic outlook and GDP growth will not reach the level we previously expected.

  • Eurozone GDP fell 0.2% in Q2 and we continue to forecast a contraction of about 0.5% in 2012 as a whole.
  • Although positive growth should resume, we expect only a marginal 0.1% expansion in 2013.
  • Changes are not only up to policy-makers. Corporates that manage to adapt to the situation will also find opportunities to thrive and contribute to growth.
  • Eurozone outlook for financial services: proposed banking union is a step in the right direction. But policy uncertainty still clouds the outlook for financial services organizations. How will this impact the Eurozone’s banks, asset managers and insurers? Read more here.

The Eurozone crisis resolution will continue to progress gradually, allowing the Eurozone to “muddle through” in its current form. The banking sector still needs to go through a deep and prolonged restructuring before confidence starts to return to the sector and, more generally, the common currency.

There is clearly a need to prepare for the future, but developing a strategy to maximize opportunities is currently very difficult for company executives. In the near term, risk has clearly increased and predicting the future has rarely been more difficult. The key theme of our Autumn Eurozone Forecast is: Looking beyond uncertainty in an era of rapid change.