Euro Zone Faces Economic Troubles As Interest Rates Rise Despite Short-Term Growth
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Private sector's interest income has supported euro zone growth, but more debts come due for refinancing in 2023, signaling potential economic trouble.
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Households benefited from interest windfall due to composition of assets, while corporate interest has turned negative.
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Higher rates will hit companies first as nearly half of investment-grade corporate debt matures in 2024-2025.
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Consumers cushioned so far due to prevalence of fixed rate mortgages, but higher bills loom as loans reset.
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Recession indicators flashing red, but downturn not on forecasters' radars given resilience so far - however, buffers against recession shrinking.