Deutsche Bank has revised its German GDP forecast for 2023 to 0% from -1.0%.

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You don’t have to look long to the markets to see signs that sentiment is improving in Europe, and now Deutsche Bank is quantifying it. Economists raised their 2023 forecast for eurozone GDP to 0% from -1.0% at the end of the year.

They noted that Germany did surprisingly well in 2022, growing 1.9% despite industry and energy headwinds.

“The main driver of growth was private consumption, which rose 4.6%, driven by the end of COVID-related restrictions, accumulated savings and fiscal policy measures to reduce real income losses caused by rising inflation. The stability of the labor market was also a supporting factor,” WB economists write. “The outlook for the first quarter has also improved due to recent favorable gas storage levels and significant declines in wholesale prices, as well as growing optimism from China due to rapid changes in COVID policy.”

They see private consumption “weakening” in 2023 despite an improvement in wages. They see a decline in exports and a slowdown in ECB policy leading to stable GDP in 2023.

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