Eurozone economy on BRINK: Optimism FALLS in latest set of WEAK data for bloc
THE eurozone economy was seeing further cracks today as another set of weak economic data pointed to falling optimism in the bloc.
Eurozone will continue to see problems says expert
Economic sentiment in the eurozone economy deteriorated by more than expected in December in the latest of a raft of disappointing figures for the European Commission. The bloc has been hit by gloomy forecasts from economists who have been predicting a slowdown of growth for the last quarter of the year, after GDP growth eased in the April to June period. In the latest bad sign for eurozone finances, economic sentiment dropped to 107.3 points in December from 109.5 in November, the European Commission said. It marks the 12th consecutive monthly drop and the lowest level since January 2017.
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The mood of consumers plunged to -6.2 points from -3.9 in November, but this did not prevent shoppers from buying more goods.
Retail sales kept growing in November, official estimates released on Monday showed, with retail trade confidence going up by 0.5 points.
Sentiment in services, a sector which produces two thirds of the euro zone GDP, went down by 1.4 points.
Last week saw business activity across the bloc fall from 52.7 in November to 51.1 in December, inching it closer toward the 50 mark.
There is a slowdown because of worries about trade and there is still a risk of financial crisis
The benchmark number of 50 is the barrier between growth and contraction, meaning anything below this line marks an economy on a downward trend.
The outlook dimmed as the composite future output PMI fell to a more than four-year low of 59.1 from 59.5.
Meanwhile, eurozone manufacturing activity on the whole was revealed to have barely expanded at the end of 2018.
Manufacturing PMI fell from 51.8 to 51.4 in November, in line with the flash estimate.
In slight relief for the bloc, the unemployment rate across the eurozone fell from 8 percent to 7.9 percent in November.
It marks a 90,000 drop in the number of unemployed.
Benoit Coeure, executive board member of the European Central Bank, spoke out about the future of the eurozone economy last week as he warned the risk of a new financial crisis still remains.
Addressing the data, Mr Coeure said ECB interest rates are set to remain at low levels as long as needed to bring inflation back to its target of 2 percent.
Speaking on French radio France Inter, he said: “The interest rates we set for the euro zone economy will stay at the current level ... until at least after the summer of 2019 and as long as necessary.”
He added: “There is a slowdown because of worries about trade and there is still a risk of financial crisis.
“We must be very vigilant.”
