The updated economic scenario and forecasts of the Economic research
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Our Q2 2025 nowcasts highlight the resilience of the Eurozone and, to a lesser extent, France. Weaker exports (after their surge in Q1 in anticipation of the US trade tariffs) penalises our forecast in Q2. It’s the opposite for the US with the Atlanta Fed nowcast at +0.7% for Q2. However, US GDP growth is estimated to have slowed down; that of the Eurozone is expected to be more stable. Japan is not expected to emerge from the stagnation observed in Q1.
Each year, summer is bookended by two landmark central banking conferences where central bankers, academics and a few members of the private financial sector congregate to discuss new research of interest for monetary policy and compare notes on the outlook: in late June, the ECB Forum held in the windy coastal town of Sintra, Portugal; and in late August in the scenic Rocky Mountains valley of Jackson Hole, Wyoming. This year, the Sintra winds were blustery and relentless, but the discussions as calm, focused and insightful as ever, an apt metaphor for central bankers’ condition these days. Some key takeaways.
Key figures for the French economy compared with those of the main European countries, analysis of data on the population and the French labour market, activity by sector, publication administration figures, inflation, credit and interest rates, corporate and household accounts.
In May, the United States stood out for an increase, albeit very slight, in its inflation (from a higher level), while it slowed sharply in the eurozone and fell slightly in the United Kingdom and Japan. Among the unfavourable developments to watch out for, energy commodity prices (oil and gas) have started to rise again since April, as has the break-even inflation rate, which could support inflation over the coming months. Conversely, two positive dynamics are emerging: wage growth is moderating, and price pressures on the supply side are easing, with the notable exception of the United States.
The economic news and highlights of recent days selected by the economists of the Economic Research.
The first half of 2025 was marked by two major turning points: the outbreak of a global trade war by the United States and, on the European side, announcements regarding rearmament efforts and the German investment plan, supporting the Old Continent's economic revival. The second half of the year will be marked by the aftermath of these announcements and is likely to be as hectic as the first, given the continuing uncertainty surrounding the outcome of the tariffs. The uncertainty surrounding the extent of their inflationary impact in the US and the duration of the Fed's monetary policy status quo is also significant. The risk of a derailment caused by fiscal policy remains
Our nowcasts for Q2 2025 deliver a positive message, with significant growth in the Eurozone (+0.3% q/q, after a very solid Q1 at 0.6% q/q), accelerating in France (+0.2% q/q) and rebounding in the United States. For the latter, the Atlanta Federal Reserve's GDPNow (+0.9% q/q) shows a strong improvement due to the highly atypical profile of imports.
Since the Paris Agreement (2015), the green bond market has been on the rise. Although still modest on a global scale (USD 2,900 billion, which is barely 2.5% of total bond outstandings), its size has more than quintupled over the last five years. The eurozone has been the driving force behind this take-off, followed at a distance by the United States and China.
