News Column

Eurozone Economic Sentiment Jumps More Than Forecast

June 27, 2012

Economic confidence in the eurozone has jumped more than expected in June amid hopes that the currency bloc will emerge from recession in the coming months, a survey released Thursday showed.

The European Commission said its closely watched Economic Sentiment Indicator (ESI) climbed for the second consecutive month to 91.3 points this month, from a May reading of 89.5.

Analysts surveyed by dpa-AFX had expected a more modest rise, to 90.5.

"The good news is that the eurozone economy seems to be bottoming out," said ING Bank economist Peter Vanden Houte. "That said, the recovery remains fragile."

Helping to lead the increase in the ESI were strong pickups in the economic sentiment in nations at the centre of the long-running eurozone debt crisis.

While Spain posted a 2.5-point gain, the ESI reading for Italy rose by 1.7. This was accompanied by a solid improvement in the mood in the eurozone's two biggest economies - Germany and France.

Also driving the ESI was a rise in the mood among consumers in the eurozone, as well as an improvement in sentiment in the industrial sector and the retail trade.

The building industry also had a more positive outlook. The region's construction sector was badly hit earlier this year by Europe's protracted cold winter weather. Sentiment in the service sector, however, slipped this month.

The ESI for the broader 27-member European Union also gained in June, rising to 92.6 from 90.8 in May, the commission survey showed.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH. Distributed by MCT Information Services

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