18 Jan 2016
Eurozone: Current account surplus to be maintained, but unlikely to improve further – Nomura
FXStreet (Delhi) – Research Team at Nomura, expects that the euro area current account surplus to be maintained in 2016-17, but for it to stop increasing this year.
Key Quotes
“We expect euro area economic growth to be led by domestic demand this year, thanks to lower energy prices, the ECB’s monetary stimulus, and the euro area’s less contractionary fiscal stance. In contrast, the weak EM economy, which now accounts for more than 50% of total extra-euro area goods exports, could lead to net exports making a negative contribution this year.
The expected growth differential between the euro area’s major export destinations and the euro area is likely to remain smaller in 2016 than in 2012-14, pointing to a slowdown in the recovery in the external balance this year. From a flow perspective, the gradually widening current account surplus of the euro area economy has been supporting EUR. However, we believe a further meaningful improvement in the current account surplus is unlikely this year.”
Key Quotes
“We expect euro area economic growth to be led by domestic demand this year, thanks to lower energy prices, the ECB’s monetary stimulus, and the euro area’s less contractionary fiscal stance. In contrast, the weak EM economy, which now accounts for more than 50% of total extra-euro area goods exports, could lead to net exports making a negative contribution this year.
The expected growth differential between the euro area’s major export destinations and the euro area is likely to remain smaller in 2016 than in 2012-14, pointing to a slowdown in the recovery in the external balance this year. From a flow perspective, the gradually widening current account surplus of the euro area economy has been supporting EUR. However, we believe a further meaningful improvement in the current account surplus is unlikely this year.”