The Eurozone Slowdown: Five Charts And A Warning

The Eurozone Slowdown: Five Charts And A Warning

Daniel Lacalle 03/10/2018 6

1. Manufacturing PMI fell to the lowest level since December

Economic Sentiment Indicator (ESI), fell in August from 111.6 to 110.9, the ninth consecutive monthly fall.

2. Capacity utilization weakened as well in the latest data

3. Industrial production weakened. Industrial production fell 0.8% vs -0.5% expected. Annual growth rate fell from 2.3% in June to minus 0.1% in July

Industrial orders fell 1.3% in June.

4. Eurozone consumer confidence fell from -1.9 to -2.9.

…Only after a 2 trillion euro stimulus and the ECB  balance sheet at 41% of GDP.

  • Growth trimmed to 2%, down from 2.1% for 2018. For 2019, the forecast is at 1.8%, down from 1.9%.
  • Unemployment remains at 8.2%
  • Government spending 45% of GDP.
  • Debt to GDP 88%.

Warning: THIS is what happens when countries abandon all reforms and bet everything on monetary policy. They sow the seeds of a recession and the central bank runs out of traditional tools.

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  • Scott Andrews

    Optimism has been dented by a sudden and rather sharp downturn in activity in the eurozone.

  • Charles Lawrence

    Even Germany has recorded a very sharp dip.

  • Gael Mungall

    The global economic expansion probably remains broadly intact.

  • Daniel White

    Good post

  • Steven Towe

    Economic growth slowed much more sharply than expected....

  • Luke Matthew

    Insightful !

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Daniel Lacalle

Global Economy Expert

Daniel Lacalle is one the most influential economists in the world. He is Chief Economist at Tressis SV, Fund Manager at Adriza International Opportunities, Member of the advisory board of the Rafael del Pino foundation, Commissioner of the Community of Madrid in London, President of Instituto Mises Hispano and Professor at IE Business School, London School of Economics, IEB and UNED. Mr. Lacalle has presented and given keynote speeches at the most prestigious forums globally including the Federal Reserve in Houston, the Heritage Foundation in Washington, London School of EconomicsFunds Society Forum in Miami, World Economic ForumForecast Summit in Peru, Mining Show in Dubai, Our Crowd in Jerusalem, Nordea Investor Summit in Oslo, and many others. Mr Lacalle has more than 24 years of experience in the energy and finance sectors, including experience in North Africa, Latin America and the Middle East. He is currently a fund manager overseeing equities, bonds and commodities. He was voted Top 3 Generalist and Number 1 Pan-European Buyside Individual in Oil & Gas in Thomson Reuters’ Extel Survey in 2011, the leading survey among companies and financial institutions. He is also author of the best-selling books: “Life In The Financial Markets” (Wiley, 2014), translated to Portuguese and Spanish ; The Energy World Is Flat” (Wiley, 2014, with Diego Parrilla), translated to Portuguese and Chinese ; “Escape from the Central Bank Trap” (2017, BEP), translated to Spanish. Mr Lacalle also contributes at CNBCWorld Economic ForumEpoch TimesMises InstituteHedgeyeZero HedgeFocus Economics, Seeking Alpha, El EspañolThe Commentator, and The Wall Street Journal. He holds a PhD in Economics, CIIA financial analyst title, with a post graduate degree in IESE and a master’s degree in economic investigation (UCV).

   

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