After 10 months of decline, the Economic Sentiment Indicator has risen in both the European Union and the Eurozone.
After 10 months of decline the Economic Sentiment Indicator has risen in both the EU and the Eurozone.
January saw the Economic Sentiment Indicator (ESI) rise by 0.6 points in the Eurozone and 1.2 points in the EU driven mainly by Germany and Spain. Many Economists hope that this is an indication that the recession in the Eurozone is coming to an end.
Economist, Christoph Weil, warns that this is only an indication of the euro economy as a whole and that many countries, mainly France, Italy and the Netherlands, have seen a further deterioration in confidence during January.
The rise in the ESI is forecast to increase again in February by a further 0.9 points, again pointing towards an end to recession in the Eurozone. However, Howard Archer, chief European and UK economist for IHS Global Insight, is keen to advise caution as the sentiment is still at a low level after 10 months of deterioration and therefore the Eurozone still has far to go.
Archer states: “Weakened domestic economic activity, intensified fiscal tightening in many countries and still serious uncertainties and concerns over the eurozone sovereign debt crisis continue to limit the upside for sentiment,” Archer continues.
“Consumers’ purchasing intentions remain limited while businesses’ employment expectations remain well below the levels seen in the early months of 2011.”