Goldman Sees Faster German Growth on Fiscal Push, Fewer ECB Cuts

Goldman Sachs Group Inc. expects a pick up in Germany’s economy on the back of its plan to increase defense spending will spillover to neighboring countries and spur others in the euro area to raise military outlays too.

As a result of the growth boost, the US investment bank no longer expects the European Central Bank to cut interest rates at its July meeting. It’s still forecasting 25 basis-point reductions at both the April and June meetings given subdued growth, progress with disinflation and downside risks from trade.