World Economy

Eurozone Economic Sentiment Hits 4-Year High

Eurozone Economic Sentiment Hits 4-Year HighEurozone Economic Sentiment Hits 4-Year High

Eurozone economic sentiment hit a new four-year high in September, European Commission data showed Tuesday, mainly thanks to more optimism in industry, and the retail and services sectors.

The overall economic sentiment rose to 105.6 this month from 104.1 in August, the highest reading since April 2011 when it was 106.1, RTE reported.

The commission’s business climate indicator, which points to the phase of the business cycle, defied market expectations of a minor decline and rose to 0.34 in September from a revised 0.20 in August.

Inflation expectations among consumers 12 months ahead, also measured by the monthly commission survey, rose to 3.2 in September after dipping to 3.1 in August and from 4.2 in July.

But that remained well below the long-term average of 19.7. Eurozone consumer inflation was 0.1% year-on-year in August, down from 0.2% in July.  

The European Central Bank wants to keep inflation below, but close to 2% over the medium term and started buying government bonds on the market in February to inject more cash into the economy and make prices rise faster.

But selling price expectations in industry still fell to -3.3 from -2.0, continuing a downward trend since June.

Sentiment in eurozone industry improved to -2.2 from -3.7 and optimism in the services sector, the biggest part of the eurozone economy, rose to 12.4 from 10.1.

The mood in the retail sector also improved to 4.1 from 3.5 in August.

Consumer confidence declined slightly to -7.1 from -6.9 and sentiment in the construction sector also worsened to -23.3 from -22.7, Tuesday’s figures reveal.