If further evidence of the economic slowdown in the eurozone was required, then we received it yesterday, with the latest GDP growth rate figures from Italy confirming a technical recession. In the three months to December 2018, the Italian economy contracted by 0.2%, following a 0.1% contraction in the third quarter of last year. That plunges Italy into its third recession in ten years.
While it is obviously of some concern, the Italian Prime Minister, Giuseppe Conte, was confident that the economy would recover throughout this year and that he was not worried. He claimed that Germany was holding Italy back, which is yet to be confirmed, but it is worth highlighting that the French economy posted encouraging figures for the final quarter of 2018. It will be hoped that the eurozone’s largest economy can do the same.
Today we will see manufacturing PMI from Germany and the eurozone, with both readings expected to gold steady on the previous reading. Last time, Germany posted 49.9, which shows contraction, so it will be hoped it can nudge higher to somewhere above 50.0.