Eurozone’s economic mood falls surprisingly
Print Edition
EUROZONE economic sentiment fell unexpectedly in June on fears that fighting in Iraq would push up oil prices and that any escalation of the Ukraine crisis could drag on eurozone growth.
The European Commission’s economic sentiment index for the 18 countries that share the euro fell to 102 from a revised 102.6 in May. Economists had forecast a rise to 103.
The decline was mainly due to a drop in optimism in the industrial and construction sectors, and among consumers.
“Because this loss in momentum spreads across a large number of member states ... a common cause, i.e. geopolitical risks, seems likely,” said Evelyn Herrmann, economist at BNP Paribas.
“Indeed, the potential of unexpected rises in oil prices driven by uncertainty in Iraq is a downside risk to growth. The potential for further sanctions on Russia is also a looming risk to the eurozone growth outlook,” she said.
The commission’s survey is typically carried out in the first half of the month, since when tensions have eased between Moscow and Western countries over Ukraine, where an uprising by pro-Russian separatists has claimed hundreds of lives.
Oil prices have dropped nearly US$3 from a nine-month high of US$115.71 hit on June 19 as output from Iraq’s major southern oilfields remained unaffected by fighting in the north and west.
The decline in economic sentiment confirms earlier poor data such as the Purchasing Managers’ Indexes and adds urgency to European Union leaders’ attempts to accelerate growth.
“The good news from the eurozone is that the economy is growing again. The bad news is that growth is excruciatingly slow,” said Christoph Weil, economist at Commerzbank.
Eurozone gross domestic product growth slowed to 0.2 percent quarter on quarter in the first three months of this year from 0.3 percent in the previous quarter.
Herrmann said that at current levels, the index still pointed to an acceleration of growth in the April-June period in the eurozone, although risks of a slowdown were growing.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
