Monday, 29 April 2013

The Economic Sentiment Indicator (ESI) for the Euro Area Declines in April, Lowest Reading for four months

The ESI for the 17 countries in the euro area declined to 88.6 in April compared to 90.1 in March, the lowest reading since December last year. According to the numbers released by the European Commission, the ESI has more or less continually dropped on a monthly basis since the start of 2011.

Bloomberg reports, 
Economic confidence in the euro area decreased more than economists forecast in April as the 17- nation currency bloc struggled to emerge from a recession and the bailout of Cyprus renewed debt-crisis concerns.
An index of executive and consumer sentiment dropped to 88.6 from a revised 90.1 in March, the European Commission in Brussels said today. That’s the lowest since December. Economists had forecast a decline to 89.3, according to the median of 26 estimates in a Bloomberg News survey.
Business confidence and investor sentiment in Germany, Europe’s largest economy, dropped more than expected in April. European Central Bank President Mario Draghi said on April 19 that the economic situation in the bloc hadn’t improved since the beginning of the month. At the same time, Draghi expects the economy to recover from a recession later this year and economists forecast growth in the second quarter, a separate Bloomberg survey shows.
And the New York Times explains,
What is likely to be of most concern is the fact that pessimism has set in even in Germany, which has Europe’s biggest economy, where economic sentiment worsened by 2.3 points. Morale also fell in France and Italy, meaning that the euro zone’s three largest economies are all witnessing a marked decline in the confidence that is crucial to get output growing again.  

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