Monday, April 07, 2003

Eurozone Economic Confidence Hits Low

Eurozone Economic Confidence is at a six year low. Hardly surprising, and consistent with the outlook that the coming months are going to offer a bumpy ride.

Business and consumer confidence across the eurozone dipped to a six-year low in March, according to a survey released on Monday. The European Commission's report, mainly carried out before the start of military action in Iraq, showed sentiment fell to 97.8 in March, compared with 98.4 in February. "Such a drop in confidence has not been observed since the events of September 11," the Commission said. Analysts had predicted the index would fall in March, partly for war-related reasons. Business confidence fell to -12 compared with -11 in February, the lowest level since September 2002, while consumer confidence dropped from -19 to a nine-year low of -21. "A further deterioration in the expected developments of the general economic situation and the financial situation of households coupled with an anticipated rise in unemployment are behind the worsening of consumer confidence," the European Commission said. Consumers' expectations about the general economic situation deteriorated in all EU member states with the exception of Ireland and Luxembourg. The news of deteriorating economic sentiment coincided with official figures that suggested eurozone inflation stayed above the European Central Bank's 2 per cent ceiling for the eighth month in a row in March. Eurostat, the EU's statistics arm, said annual inflation was expected to be 2.4 per cent in March according to a flash estimate. That is unchanged from February's figure.
Source: Financial Times

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