Goldman Sachs, JPMorgan Predict Euro-Area Recession – Economics Bitcoin News

JPMorgan, Goldman Sachs global investment bank and Goldman Sachs have both predicted a euro-area recession. “The risks to our forecast are skewed toward a sharper recession in the event of an even more severe disruption of gas flows, a renewed period of sovereign stress or a U.S. recession,” said the economists at Goldman Sachs.

Goldman Sachs’ Predictions

Goldman Sachs (a major international investment bank) and JPMorgan published Wednesday reports that independently predicted a euro-area recession.

Goldman Sachs’ analysts, led by chief European economist Jari Stehn, expect a euro-area recession in the second half of this year that will last until the end of the year. The analysts also predict a contraction in the third quarter and 0.2% for the fourth quarter. They expect growth to resume in 2023.

“Looking across countries, we have Germany and Italy in clear recession in the second half, while Spain and France continue to grow,” the Goldman Sachs economists detailed, elaborating:

We see a greater chance of severe disruptions to gas flows or renewed periods of stress in America, which could lead to a recession.

The economists highlighted some reasons for the downturn, including a looming gas crisis and Italy’s political troubles that could delay the disbursement of European Union aid.

JPMorgan’s Predictions

JPMorgan published a Wednesday note warning that the eurozone would be facing a mild recession in early 2019. The bank’s economists have cut their economic forecasts. Now, they predict that the eurozone will see a 0.5% increase in GDP this quarter. Then there will be a contraction in 0.5% for both the fourth and first quarters of next year.

JPMorgan analysts also added:

The ECB is expected to comply with our expectations. [European Central Bank]Additional 50 basis point hikes will be offered by the year-end

The bank’s analysts have cut their previous forecast of 75 basis points in three installments. Now they expect to see 25 basis point in September and October.

The two global investment banks’ recession forecasts follow a warning on Tuesday by the International Monetary Fund (IMF) that both Europe and the U.S. would see virtually no growth next year if Russia completely cuts off Europe’s gas supply and further reduces its oil exports.

The U.S. economy experienced a contraction from April to June, for the second straight quarter. The Bureau of Economic Analysis reported Thursday that the country’s GDP fell 0.9% at an annualized pace for the period. But President Joe Biden repeatedly denied that there were any recession worries. Janet Yellen, Treasury Secretary, stated Thursday that the U.S. is not in recession but in a transition phase.

Do you have any thoughts about JPMorgan’s prediction and Goldman Sachs’ predictions? Comment below to let us know your thoughts.

Kevin Helms

Kevin, a student of Austrian Economics and evangelist since 2011, discovered Bitcoin. His main interests are in Bitcoin security, open source systems, network effects, cryptography, and intersections between economics, cryptography, and Cryptography.

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