Overview

recovery

4 reasons why we should expect an Economic Recovery in 2017 ...and how to avoid the five risk factors

According to Michael Heise, Chief Economist of Allianz SE, the after-Brexit era is, despite everything, proving to be less apocalyptic than expected and, estimates for 2017, seem moderately optimistic, if the right strategy will be implemented.

4 reasons why we should expect an Economic Recovery in 2017

Europe is in a “permanent crisis” mode and of widespread mistrust

Is the picture really so bleak or good news is in view?

According to Michael Heise, Chief Economist of Allianz SE, the after-Brexit era is, despite everything, proving to be less apocalyptic than expected and, estimates for 2017, seem moderately optimistic, if the right strategy will be implemented.

In the live webinar which took place on October 10, Heise has described:

  • the economic outlook based on the monetary and financial market policies, labor world, oil industry and socio-political framework
  • the percentage of risk related to a potential, additional “shock” in the Eurozone
  • measures to be implemented in order to avoid the worst scenarios occur.

what-can-be-done-to-counter-centrifugal-forces-within-the-eu

The uncertainty tied to economic stagnation and political instability is not a Europe state but rather, global. Monetary policies, after Draghi’s effective action in 2012-2013, have had, in the following years, a much less significant impact. We cannot blame the economic crisis for the decline in consumption, considering that the retail sector has seen an encouraging + 8% from 2013.

Heise identifies in structural reforms and improved conditions for domestic investment, the winning formula to return to growth.

eurozone-confidence-2017

Despite some positive elements (such as the decrease in unemployment) are “patchy” with Italy and France in a standstill versus the growth stars as Ireland and Spain, we have several data showing a possible, modest, recovery. Following, four main issues:

  • resilience of after-Brexit markets
  • consumer confidence in the Eurozone is markedly rising compared to the negative peak of 2013
  • encouraging signs by lower energy prices and Euro trends
  • reduction in the unemployment rate.

The risks to be avoided, however, are numerous and must be clearly spotted. Should said risks add up, they could be the reason for a further domino effect shock.

risks-and-side-effects

The likelihood ratios that the most extreme conditions could take place are still very low compared to 65% of a possible “soft Brexit” in Europe, considered, with more control over migration flows (though without resulting in populism) and a low and heterogeneous growth, the most reliable option against the threat of a generalized deflation and contraction.


To see the upcoming events on the macro-economic scenario, click here.



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