JPMorgan Joins Goldman, Hikes Euro Area's 2025 Economic Growth Forecast
J.P.Morgan and Goldman Sachs have revised their forecasts for the euro area's economic growth, increasing the projected growth rate to 0.8% in 2025 due to Germany's fiscal loosening reforms. The European Central Bank (ECB) has also lowered its deposit rate to 2.5%, but warned of "phenomenal uncertainty" that could impact policy easing. However, JPM economists caution that uncertainty from Trump's tariff policy and potential US tariffs on European goods could weigh on economic growth in the coming months.
- The revision highlights the interconnectedness of global economies, where a country's fiscal policies can have far-reaching effects on neighboring countries' growth prospects.
- Will this revised forecast lead to a shift in monetary policies across Europe, potentially influencing the interest rates and borrowing costs for businesses and consumers?