Low confidence hints at a deep Eurozone slump

 
Tim Wallace
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CONSUMER and business confidence fell in the Eurozone in April, official data showed yesterday, adding to fears that the current economic slowdown will not be over any time soon.

The European Commission’s (EC) economic sentiment indicator fell 1.7 points to 92.8 this month, well below its long-term average of 100.

The decline was driven by falling confidence in the services and industrial sectors, although retail sentiment improved.

Italy registered the sharpest fall of 5.7 points to 83.1, followed by Spain’s 1.8 point drop to 89.1 and Germany’s fall of one point to 103.3.

“Divergences within the region are still extremely wide, with the peripheral economies all facing deep recessions which will, of course, make their fiscal consolidation plans even harder to achieve,” said Capital Economics’ Ben May.

“There are tentative signs here that the first quarter’s likely contraction in GDP might be followed by a third consecutive quarterly fall in the second quarter.”

The EU-wide measure held steady at 93.2, in part helped by sentiment in the UK rising 4.2 points to 95.7.

The Netherlands also registered an improvement, with the index rising 1.2 points, while France saw a relative stabilisation, falling just 0.4 points.