Eurozone

Welcome to the Ernst & Young Eurozone Forecast & Outlook for financial services.

Will the Eurozone recovery be postponed?

Key highlights: Spring 2013

For some time we have been forecasting a “lost decade” of growth for the Eurozone. Many other forecasters have now come to the same conclusion and our expectations remain broadly the same. However, the risk of an imminent Eurozone breakup, which weighed heavily on business and consumer confidence for much of 2012, has been averted.

• The economy is expected to start growing again from mid-2013, but overall a decline of 0.5% is still forecast for 2013, followed by very sluggish growth of only 1.4% a year in 2014-17.
• Improving competitiveness and strengthening demand from the US and emerging markets will start to boost Eurozone exports over the coming year.
• The return to very modest growth that we expect to see in the peripheral countries in 2014 will initially be driven by business investment and exports and subsequently, once the labor market starts to improve, by consumer spending.
• Some threats remain. Political concerns in Italy, Spain and some smaller Eurozone countries could start to undermine confidence again. This could lead to renewed market volatility and may heighten fears of “austerity fatigue” in some of the peripheral countries.
• Eurozone outlook for financial services – Despite encouraging signs within financial services, the Eurozone’s recovery will follow an uneven trajectory.

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