In this publication we introduce our Danske growth tracker for the euro area. Eurozone recession fears are building in the markets and a broad variety of economic and financial variables provide different messages regarding the severity of the euro zone slowdown we are currently experiencing. Our growth tracker aims to distil these various messages into an easy-to-understand signal regarding the state of the economy.
With a value of -0.1 the index clearly remains outside recessionary territory. It is primarily financial variables that are showing recessionary tendencies, while economic variables on average remain close to their historical mean. We draw comfort from this fact, as financial variables historically have exhibited more volatility and given less reliable signals about an imminent recession.
That said, the implied monthly probability of a slowdown is currently at the highest level since 2011 and the risk of a recession lurking in the background remains elevated. However, in our base case we do not expect a euro area recession in the foreseeable future.
To read the entire report Please click on the pdf File Below..