19 July 2016

欧州委員会ECFIN（経済・金融総局）、英国民投票の結果を受けて英国とユーロ圏の経済成長見通しを下方修正

INCREASED UNCERTAINTY WEIGHING ON THE GROWTH OUTLOOK

The economic landscape has not changed much in the weeks since the spring forecast was published on May 3, but the results of the UK referendum on 23 June have modified the conditions for the way ahead. The ‘leave’ vote has resulted in financial market volatility, abrupt exchange rate changes, and a substantial increase in uncertainty. These developments and the uncertainty resulting from what is expected to be a protracted period of exit negotiations have the potential to damage the recovery in the EU. While uncertainty is expected to diminish over time, forthcoming changes in the economic and political relationships between the UK and Member States could have a longer lasting impact on the medium to long-term economic outlook. [...]

Increased uncertainty has resulted in a deterioration of the growth outlook for the UK but also for the rest of the EU in 2016 and 2017. In recent months the EU economy has broadly developed in line with the spring forecast, i.e. the economic expansion has been sustained at a moderate pace, almost entirely driven by domestic GDP components. Private consumption has benefitted from low oil prices, very accommodative monetary policies and ongoing job creation; investment has accelerated slightly; and net trade has remained a drag on growth. Before the UK referendum, GDP growth in the euro area would have been expected to reach 1.7% in both 2016 and 2017. However, the UK’s ‘leave’ vote is expected to slow private consumption and investment and impact on foreign trade. Taking into account the results of scenario analyses, growth in the euro area is expected to moderate in 2016 (to 1.5%- 1.6%) and in 2017 (to 1.3%-1.5%). This implies a loss of GDP of ¼ to ½% by 2017, which is less than in the UK (1 to 2¾%).

The impact on inflation is expected to be concentrated in 2017 both in the euro area (-¼ to 0 pps.) and in the UK (⅔ to 1 pps.). The UK’s ‘leave’ vote has generally increased risks to the outlook, particularly on the downside. The referendum has created an extraordinarily uncertain situation. Due to the lack of information about the new equilibrium after the UK’s exit, many elements have not yet entered the assessment but nevertheless constitute substantial risks to the outlook. As studies on the potential impact of a ‘leave’ vote had suggested, most of these risks are on the downside. They come on top of the previously identified risks. [...]

3. FINANCIAL MARKETS

The UK referendum began impacting financial markets well before the referendum day…

Developments in financial markets ahead of the UK’s vote were driven by referendum-related concerns which added to a more general riskaversion sentiment prevailing since the beginning of this year. Shortly before the referendum, market participants expected the ‘remain’ side to win, and positioned themselves accordingly, which exacerbated market reactions after the referendum result was published.

…but the ‘leave’ vote triggered significant market reactions,...

At the end of June, the UK referendum outcome triggered significant ‘safe haven’ flows with rising risk premia across market segments and falling sovereign bond yields. All benchmark 10-year sovereign yields declined significantly, including the German bund, which turned negative. Sovereign spreads of non-core euro area Member States widened only slightly in the direct aftermath of the vote, before starting to narrow somewhat amid increasing expectations of further ECB monetary policy easing. Euro area corporate bond markets also were hit relatively little, backed by the ECB’s corporate bond purchases programme. Equity markets fell more abruptly, particularly for European banks. While a measured recovery has followed in several segments of financial markets, political and economic uncertainty over the medium-term impact of the UK referendum remains high and weighs on market sentiment.

…particularly in foreign exchange markets…

Following the UK referendum, developments in foreign exchange markets were dominated by the steep depreciation of sterling, which fell by about 10% on June 24. Most cross rates between ‘safe haven’ currencies (e.g. the USD-EUR rate) were less affected. In subsequent days, foreign exchange markets remained volatile and sterling depreciated further.

The broadly unchanged nominal effective exchange rate of the euro (between the referendum day and the cut-off date) masks an appreciation vis-à-vis sterling of about 10% and a depreciation of a similar magnitude vis-à-vis the Japanese yen. More generally, the euro has strengthened against other EU currencies (e.g. the Swedish krona, the Polish złoty) while it has weakened against the US dollar and most emerging market currencies.

…weighed on the European banking sector...

The European banking sector continues to be challenged by low profitability in an operating environment of low interest rates and low nominal economic growth. In this unfavourable context, bank shares recorded sharp losses in the wake of the ‘leave’ vote. The further flattening of the yield curve and the weaker growth outlook make it harder for many banks to improve their balance sheets by increasing capital and/or reducing nonperforming loans. The banking sector, particularly in Italy, has come under significant pressure recently as the UK referendum result exacerbated pre-existing vulnerabilities and led markets to question the capacity of these banks to repair their balance sheets. As regards bank lending, data up to May showed a positive trend in the euro area as a whole, but the current market jitters in the banking sector may end up having negative consequences on loan availability in some countries.

…and altered expectations about the path of major central banks’ policies. [...] The Bank of England took macro-prudential policy action by reducing the countercyclical capital buffer banks have to hold. It also hinted at a possible loosening of monetary policy as soon as this summer, voicing concerns about economic and financial stability risks which have become more visible following the outcome of the vote in the UK referendum. While the ECB has considerably eased its monetary policy stance in the past few months, it signalled it would react to an unwanted tightening of financial conditions that would alter the inflation outlook by using all available measures.

Full outlook

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