C Central Banks

Eurozone 3Q GDP Will Largely Exceed Expectations

30 October, 2020

On Friday, Eurostat will release the first estimate of Eurozone 3Q GDP. According to Bloomberg, the consensus expects a print of 9.6% QoQ (vs -11.8% prior). Regional surveys and latest Lagarde comments confirmed that the consensus looks pessimistic and that Eurozone 3Q GDP will largely beat expectations.

 

1/ French, German, Italian and Spanish reports showed that GDP rebounded significantly in 3Q, beating expectations:

 

2/ Austrian and Belgian reports also pointed to a sharp rebound:

 

3/ During the ECB press conference, Christine Lagarde highlighted that 3Q GDP figure “might surprise on the upside“.

 

All in all, it looks pretty clear that 3Q GDP will largely exceed expectations with my proxies now pointing to a figure that will easily beat the highest forecast in the consensus (+11.5% QoQ). However, as I already flagged, the dynamic will change dramatically in 4Q with another contraction.