Santander Corporate & Investment | The final outcome will probably be determined by the economy but, as our economists remind us, the 4Q eurozone GDP data released late last week (0.0% quarter-on-quarter and 1.8% year-on-year, Exp 0.0%/1.9%, Last 0.4%/2.4%) mask weak dynamics.
The fact is that most of the growth is coming from public spending while weak domestic demand was dragging down imports and explaining the second (poor) growth driver: the improvement in the trade balance. According to our economists, the first month’s activity data point to an economic slowdown in 1Q23, which is likely to translate into a technical recession with negative growth in 1Q and 2Q23.
