Sunday 11 December 2016

Confidence in recovery is knocked by EU forecasts

Published 26/02/2010 | 05:00

EU's Economic and Monetary Affairs Commissioner, Olli Rehn. Photo: Bloomberg News
EU's Economic and Monetary Affairs Commissioner, Olli Rehn. Photo: Bloomberg News

CONFIDENCE in the outlook for the euro area unexpectedly worsened in February after the region's recovery almost stalled in the fourth quarter.

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An unexpected fall in business investment in the final three months of 2009 also renewed concern about Britain's economic recovery.

Corporate spending on buildings, vehicles and equipment dropped 5.8pc from the third quarter, Britain's Office for National Statistics said.

Meanwhile, an index of executive and consumer sentiment in the 16 nations using the euro slipped to 95.9 from a revised 96 in January, the European Commission in Brussels said.

The commission also said Europe's economic recovery may fail to gather strength for most of 2010 as governments phase out stimulus measures and demand remains subdued.

The commission was commenting on its new forecasts, which see gross domestic product (GDP) in the euro region rising by 0.2pc a quarter in the first three-quarters of the year before picking up to 0.3pc in the final three months.

It said domestic demand remained weak and it was not yet clear to what extent the euro region would benefit from a global recovery.

Overall, the commission sees the growth of 0.7pc in the euro area economy this year, after a 4pc contraction in 2009.

The EU's Economic and Monetary Affairs Commissioner, Olli Rehn, said: "All in all, the recovery is in progress." However, he added: "It is still fragile."

Irish Independent

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