Wednesday, 6 March 2013

Banca D'Italia €-Coin Index Improves Slightly on Last Month, But Continues to Slide on Last Year

The Banca D'Italia €-Coin Index, which aims to estimate quarter on quarter percentage change for GDP in the euro area, ended February on -0.20, a slight improvement on the -0.23 reported in January. Compared to February last year however, when it finished on -0.06, the February figures represented a substantial drop (as did the Economic Sentiment Indicator).

It is worth noting that the €-Coin Index substantially under estimated the downturn in 2008/2009 and that it has been too optimistic a couple of times during the last couple of years as well (the red dots in the chart below represents actual GDP quarterly growth).

With a massive debt pile of some 90% of GDP, an industrial production index which continues to fall and unemployment rates which continues to increase, even the EU have now finally, and officially, admitted that the euro area economy will shrink in 2013. Just as one would expect for such a centrally planned economy spending tax payer money on bailing out zombie banks with good help from the ECB money printing machine. And do expect politics, not economics, to continue to dominate the agenda for the EU bureaucrats for the foreseeable future. At least until the tax payers one day finally wake up and realise the tragedy of the euro and EU bureaucracy.

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