Make Kitco Your Homepage

Off The Wire

Goldman Sachs lowers euro zone growth forecast; sees no growth for UK

Kitco News

March 20 (Reuters) - Goldman Sachs lowered its 2023 economic growth forecast for the euro zone on Monday, citing ongoing stress in the global banking system and an increase in economic uncertainty.

The investment bank said it sees a 0.3% hit to the euro zone's real gross domestic product (GDP), reducing the growth forecast to 0.7% for 2023.

It added that it sees no economic growth in UK this year and no longer expects the Bank of England (BoE) to hike its policy rate in May, leaving its terminal rate forecast for BoE at 4.25%.

Global financial markets have been rattled by the collapse of some regional U.S. banks and the larger Swiss lender Credit Suisse, along with interest rate hikes by major central banks.

Goldman Sachs said there might be a tightening in bank lending by around 10 percentage points in both the euro area and the UK, due to banking stress and rise in financial spreads.

Reporting by Siddarth S in Bengaluru; Editing by Varun H K
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.