Skip to content. | Skip to navigation

Personal tools
Sections
You are here: Home Breaking news Eurozone economic confidence flat in July

Eurozone economic confidence flat in July

31 July 2014, 10:54 CET

(BRUSSELS) - Business and consumer confidence in the economic outlook for the eurozone was little changed in July, suggesting a modest recovery may be near peaking out, official figures showed on Wednesday.

Analysts said the figures were cause for some concern, especially after the European Union adopted tough economic sanctions against Russia over the Ukraine crisis which could put additional pressure on the economy.

The overall Economic Sentiment Indicator (ESI) for the 18-nation eurozone edged up 0.1 point to 102.2 points in July, the European Commission said.

In the full 28-member EU, the ESI fell 0.6 points to 105.8, it said.

By country, Spain was down 0.6 points and Germany, the bloc's powerhouse economy, dropped 0.5 while struggling France was up 0.5 and Italy jumped 1.6.

James Howat at Capital Economics said the report, when combined with other recent data, showed there was "a real risk that growth ... may already be nearing its peak."

The figures mean that any pick-up in the three months to September "is likely to be pretty small," Howat said, adding that the European Central Bank may have to take even more stimulus measures soon to keep the economy on track.

In the first quarter of 2014, the eurozone economy eked out growth of just 0.2 percent compared with fourth quarter 2013 when it expanded by the same rate.

Estimates suggest the Russian sanctions adopted on Tuesday could shave 0.3 percent off the EU economy, outpacing such low growth rates.

Peter Vanden Houte at ING Bank said the ESI report was positive in that it showed the economy at least holding up "relatively well."

However this was largely due to the industrial sector "which is likely to be most vulnerable" to sanctions, Vanden Houte said.

"In that regard a genuine risk is that the economic fall-out of the crisis in Ukraine becomes the straw that breaks the camel's back for the European recovery," he said.

Second-quarter eurozone growth figures are due for release on August 14.


Document Actions