The Italian elections on March 4 will likely yield a hung parliament. The reform outlook is weak and some fiscal slippage is likely. We believe the risk of an unexperienced nationalist government is limited, but the market might well be underpricing risks.
We predict wage growth to peak at 3.0 to 3.3% in the next two years. While this is higher than current levels, it’s on the low end of the Fed’s preferred range. At the same time, our models show that we’re already getting close to the peak of the economic cycle.
Dutch Housing Market Quarterly Dutch version
In 2017 house prices in the Netherlands rose on average 7.6% as sales reached new heights. For 2018 we expect that prices will increase even faster, making owner-occupied homes accessible for fewer people.
Economic Update Dutch version
The Dutch economy has fully recovered from the crisis. In 2018 and 2019 growth will remain high and the Dutch economy will reach the top of the business cycle. Producer confidence is at the highest level ever measured, but inflation remains relatively low.
The Eurozone economy finished 2017 at a high note, with annual growth coming in at 2.5%, the highest figure since 2011. The outlook for 2018 looks good as well, likely prompting us to upwardly revise our forecasts soon.
The risk of a new clash between Catalonia and Madrid in the coming weeks has dropped. Tensions will remain high in the coming years, but Catalonia will stay part of Spain. Notably, the political crisis has had limited impact on Spain’s economy.