Over the past few days, the failure of SVB Financial Group and Signature Bank in the US and concerns over Credit Suisse's ability to restore stakeholders' confidence have led to heightened volatility in European financial markets, with banks' stocks particularly hit. Concerns over liquidity pressures or potential contagion could keep instability elevated for some time. In our view, if financial market volatility is prolonged, this is likely to weigh on the economic outlook for Europe and pose so...
Individuals, relatives and NGOs are providing significant support to the large inflow of refugees from Ukraine. Over time, the national government response as well as the possible joint response of the European Union (EU) member states to offer humanitarian assistance and protection will bring higher public sector costs. Ukraine's geographic EU neighbors such as Poland (rated A, Stable), Slovakia (A (high), Stable), Hungary and Romania will incur higher public expenditures because of the very la...
In this latest edition of the DBRS Morningstar Macroeconomic Update for Europe, we discuss the supply bottlenecks and the spike in energy prices that Europe is experiencing and the implications for the inflation outlook, monetary policy and economic outlook in the near term. Key highlights: EURO AREA -- DBRS Morningstar expects some of the factors leading to higher inflation in the euro area (EA) to be transitory. Price pressures, so far largely emanating from supply shortages and high energy ...
After a weak start to the year, DBRS Morningstar expects the economic recovery in the euro area to resume and speed-up later in 2021, as the vaccine rollout accelerates, likely reducing hospital admissions and facilitating economic re-opening, and the fiscal and monetary support remains in place. Both domestic and external demand should drive the recovery, with pent-up demand in particular providing a boost thanks to savings accumulation. Nevertheless, risks of further delays or setbacks in the ...
DBRS Morningstar released its latest edition of the Macroeconomic Update for Europe, discussing how the resurgence of new Coronavirus Disease (COVID-19) cases in some European countries in recent months has increased downside risks to the near-term economic recovery in the euro area (EA) and the United Kingdom (UK).
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