UNITED STATES (OBSERVATORY NEWS)
Moody’s said on Tuesday it had revised its outlook for the euro zone (19 countries) to “negative” in 2020, from “stable” last year.
In a statement, Moody’s revised its bloc’s future outlook to “a deteriorating global environment”, noting that euro zone economies are vulnerable to increased protectionism and geopolitical risks, as their ability to tackle economic shocks declines.
The statement said: “Our negative view of the euro area reflects the limited temporary capacity in most of the member states, to meet the deteriorating external environment.”
The statement added: “The deteriorating global environment will affect growth in the open economies of member states during 2020, despite flexible domestic demand and the easing of monetary policy, and some financial stimulus that will mitigate the impact.”
He continued, “It is also expected that high levels of public debt will restrict the fiscal space of governments in maneuvering in the event of a severe slowdown, with” monetary policy approaching the exhaustion of its effectiveness. ”
And many countries in the eurozone, specifically Belgium, (Roman Cyprus), France, Greece, Italy, Portugal and Spain, have debt ratios of about 100 percent of GDP, or much higher in some cases, which is unprecedented in the past few decades, according to Moody’s.
She noted, “The debt rates in France and Italy continue to rise, from their high levels in the past year, reaching an estimated 99 percent and 135 percent of GDP, respectively.”
And recently, the Commission lowered its forecast for growth in the euro area to 1.1 percent in 2019 and 1.2 percent in 2020, due to global trade tensions.
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