Economic data offers a glimmer of hope for Germany and Italy

ECONOMIC data published yesterday offered a glimmer of hope for the embattled Eurozone countries.

Germany, Europe’s largest economy, saw its consumer price inflation ease by more than expected reflecting a sharp drop in oil prices, while Italy said confidence among its businesses had improved unexpectedly in June.

The only downbeat note came from Spain which suffered its 23rd consecutive month of falling retail sales, according to official data.

Germany’s consumer price inflation eased to 1.7 per cent year-on-year in June, from 1.9 per cent in May, according to preliminary data released yesterday by the Federal Statistics Office.

The easing in inflation should give a boost to consumers, whose spending is expected to be the German economy’s saving grace this year as the crisis starts to hit home.

Analysts said the reduction would also give the European Central Bank more scope to loosen policy as the Eurozone debt crisis worsens.

Meanwhile, in Italy the seasonally adjusted confidence index for the manufacturing sector improved to 88.9 in June from 86.6 in May, data from the statistical office Istat showed yesterday. The composite business climate index was almost steady at 75.4 during the month compared to 75.5 in May.

In Spain, however the mood remained downbeat with retail sales down 4.9 per cent year-on-year in May on a seasonally adjusted basis, data from the National Statistics Institute showed.

This follows a revised fall of 10 per cent in April.