23rd Sep 2023

Eurozone economic confidence rises

  • The recession in Spain is easing new figures show (Photo: Valentina Pop)

Economic confidence in the 17-nation eurozone rose in July reaching the highest point since April last year.

The European Commission's monthly measurement of sentiment among consumers and businesses rose to 92.5 from 91.3 in June.

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It is the third consecutive month to register a rise, and indicates that businesses are more willing to invest and consumers more willing to spend.

The commission's data, released Tuesday 30 July, showed that economic confidence grew in four of the eurozone's five biggest economies, with Italy registering the greatest increase. The Netherlands, by contrast, showed a weakening of sentiment.

But the positive news is tempered by the unemployment rate which is at record high (12.1%) in the eurozone. Coupled with the austerity measures being imposed by governments, driving down demand, any economic recovery is set to be patchy.

Meanwhile the commission's data coincided with data showing that the recession in Spain - the eurozone's fourth largest economy - is easing.

Figures released by the Madrid-based National Statistics Institute show that the Spanish economy contracted for the eighth quarter in a row, but at a slower rate.

The country's gross domestic product contracted 0.1 percent between April and June. In the previous quarter it contracted 0.5 percent while the fourth quarter of 2012 saw a contraction of 0.8 percent.

The figures lend credibility to the government's claims that the country will return to growth in 2014.

The fragile signs of recovery mean that the European Central Bank is unlikely to resort to further stimulus measures when it meets Thursday but will keep its record-low interest rate (0.5 percent) unchanged.

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