Euro area’s economic growth data for the third quarter is set to release tomorrow. According to a DBS Bank research report, the economic growth is likely to have decelerated slightly to 1.1 percent year-on-year, owing to downside risks stemming from weaker exports, which impinged on the domestic manufacturing sector.
Bundesbank had shown some concerns regarding Germany possibly falling into a technical recession in the third quarter. However, a still firm household demand a non-manufacturing private sector activity is likely to have provided some offset.
Meanwhile, inflation is expected to have little changed at 1 percent year-on-year in October, which is much below the target rate. New ECB chief Christine Lagarde will assume office this week after outgoing head Mario Draghi ended his tenure with a downbeat assessment on economic conditions during last week’s review.
“Asset purchases are set to resume in November, and we expect the new chief to stay dovish but push national governments to step on the fiscal pedal to boost growth”, added DBS Bank.
