RaboResearch - Economic Research

Special

US: Technical recession

The advance estimate for Q2 GDP growth shows that the US is in a ‘technical recession’, which means two consecutive quarters of negative GDP growth. Meanwhile, the strong labor market is telling a different story. Therefore, it is not likely that the current economic circumstances will lead the NBER to call an official recession in H1.

Economic Update

Italy: Elections amid a cost of living crisis

In the second quarter, Italy’s economy performed better than expected and GDP is again larger than pre-pandemic. Still, a recession looks inevitable going forward, due to the cost of living crisis. After elections, policy could move significantly right.

Economic Update

Eurozone GDP surprise masks weakening trend

The Eurozone economy beat expectations in the second quarter, as it grew by 0.7%. We still expect the eurozone economy to enter a shallow recession in the winter, although the risks of a severe contraction due to an energy crisis have increased.

Special

UK: Stagflation nation

The economy of the United Kingdom experiences a ‘European’ demand shock but also has ‘American’ labour shortages. Weak growth and high inflation is the result. Meanwhile, there is a constant threat of a trade war with the European Union.

Special

United States: The inevitable recession

A recession seems inevitable for the US: even if the economy is able to absorb the exogenous shocks to the supply side, the response of the central bank to the wage-price spiral will cause a recession from within.

Special

The Third Round of French Elections

On June 12 and 19, the French will go to the ballot boxes for the legislative elections. Polls indicate that Macron’s center coalition is set to win a majority, but this is far from certain. If he isn’t able to secure a majority, his hands will be tied to a significant extent.

Special

Re-appraising Eurozone inflation

Another revision to our Eurozone forecast brings into question the timing of peak inflation and how fast it will decline afterwards. Commodities and supply chains cannot fully explain recent inflation surprises, suggesting that some of this may be structural.

Economic Comment

France: A Second Term for Macron

Macron has won a second term as president of France. His first term was quite successful from an economic point of view and he is likely to push on with his reform agenda. The degree to which he is able to do so, is dependent on the outcome of the legislative elections in June.