Business World

Monday 20 November 2017

A welcome increase seen in eurozone confidence

European Central Bank (ECB) president Mario Draghi
European Central Bank (ECB) president Mario Draghi

Angeline Benoit

Economic confidence in the 18-nation euro area increased more than forecast in May, as the European Central Bank considers taking action next month to avert the risk of deflation and spur growth.

An index of executive and consumer sentiment rose to 102.7 from 102 in April, the European Commission in Brussels said yesterday.

ECB President Mario Draghi indicated this week that the central bank is focusing on liquidity measures it could deploy to help free up lending to companies and households to spur jobs and growth. The eurozone economy expanded for a fourth quarter to begin the year, though growth remains anaemic and the inflation rate is less than half the ECB's target.

"Economic confidence is improving in line with consumer confidence and business sentiment," said Pernille Bomholdt Nielsen, an analyst at Danske Bank in Copenhagen.

"The change in sentiment will gradually unleash pent-up demand in investments and durable goods, leading to a stronger recovery in the second half."

Industrial confidence improved to -3 from -3.5 in May, according to yesterday's report. Sentiment in the services industry rose to 3.8 from 3.5. Consumer confidence increased to -7.1, in line with an initial reading, announced by the commission on May 21. (Bloomberg)

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