European consumer confidence tumbled this month towards the record lows seen during the financial crisis in 2009 as the continent braces itself for a deep recession caused by coronavirus lockdowns.
The European Commission (EC) today said its gauge of consumer confidence for the Eurozone fell to minus 22.7 points, down from minus 11.6 in March.
Last month’s figure was a five-year low, but sentiment among European consumers has worsened as the coronavirus crisis has intensified. The EC said the gauge had dropped “close to the record lows recorded during the Great Recession in 2009”.
The new reading comes as some European countries loosen their coronavirus restrictions, but indicate that consumer spending is unlikely to bounce back quickly.
Countries such as Germany, Spain and Austria have loosened some restrictions on businesses. They will prove a test case for other countries.
The International Monetary Fund (IMF) has said it expects the euro area economy to shrink by a record 7.5 per cent this year. It said the European economy as a whole would shrink 6.7 per cent.
Analysts are divided on whether there will be a quick rebound, however. Vital to any recovery will be consumer confidence, which has shown no sign of rebounding even as investors have staged a stock market rally.
European markets are up as much as 20 per cent from recent lows, after crashing in February and March. They have had a shaky week, however, with oil prices crashing and the EU set to meet tomorrow to thrash out a joint economic approach to coronavirus.
Countries such as Italy, France and Portugal are pushing for jointly issued “coronabonds” to help ease the strain on some countries. Italy and Spain have been among the hardest-hit countries in the world by the virus, but have high levels of debt.
Northern European countries like Germany and the Netherlands are opposed to sharing debt, however, although they say they want to ease the strain on weaker countries.