Euro area: recession risk still low

Afte r a spell of weak data , our recession risk model still shows only a small probability f or a n outright recession in the euro area . Based on the data up to now, our model calculates only a 6% probability of a recession in the next two quarters. This picture would change , however, should the euro area face a further deterioration in the external environment on the back of escalating trade tensions and/ or a hard Brexit. But in the absence of such a shock, we would expect growth to remain in positive territory during the coming quarters and to eventually re-accelerate during the summer to around trend growth .