Falling confidence in Eurozone points towards another recession
CONFIDENCE in the Eurozone fell for the fourth consecutive month in September, adding to the growing body of evidence that the currency union is edging toward recession.
The headline figure of the European sentiment index (ESI), published by the European Commission, fell to 99.9 in September from 100.6 in August.
Figures released earlier in the month showed the economy only grew 0.7 per cent in the months April to June and Markit’s purchasing managers index indicated weak growth in September.
Germany’s ESI fell to 103.8, a long way off its 2014 peak of 107.8 in May. Its steady decline, as well as the fact the economy contracted in from April to June, adds to the fears that the Eurozone’s largest economy is at risk of a third recession since 2008.
Italy was another major Eurozone nation to see confidence drop, with the ESI at 96.9 for September – it was 101.9 in July. The Italian economy contracted in the first half of the year and the downward trend now looks set to continue.
Pressure will be on the European Central Bank which plans to announce the details of its asset purchases on Thursday afternoon. However, ECB chief Mario Draghi says nations need structural reform.