Published On: Wed, May 15th, 2019

EUROZONE CRISIS: Economy DRAGGED DOWN by France and Italy in BLOW for Macron


Eurostat figures show output in the 19 countries sharing the euro fell by 0.3 percent on the month, in line with market expectations, with the second and third largest economies in the area leading the loss. The monthly fall also follows a decrease on the previous month, when production fell 0.1 percent in February. France saw production decline by 1.0 percent in March, while Italy recorded a fall of 0.9 percent in the same month. The shift down in gear followed increases in the two previous months in both countries.

Germany’s first positive month in the year was not enough to offset marked falls of output in France and Italy, resulting in the overall negative reading.

The biggest economy of the currency bloc recorded a 0.4 percent hike after two consecutive monthly falls.

On a larger scale, industrial production was up across the eurozone by 0.6 percent year-on-year.

Output was driven down mostly by a 1.0 percent drop in non-durable consumer goods, as retail sales ground to a halt in March.

However, production of durable consumer goods, such as cars or fridges, went up by 0.7 percent on the month as consumers splashed the cash on more expensive items.

Last month, new figures revealed the eurozone economy grew more than expected in the first quarter, rebounding from a slump in the second half of 2018.

But economists said the numbers gave the European Central Bank little indication of whether to continue stimulating growth with loose monetary policy or to start tightening.

Eurostar said gross domestic product (GDP) rose 0.4 percent quarter-on-quarter in the first three months of 2019.

This was up from 0.2 percent in the fourth quarter of 2018 and 0.1 percent in the third.

Vanden Houte of ING said: “The figures probably haven’t made the European Central Bank any wiser.

“The economy remains solid enough not to need extra stimulus.

“But at the same time not much has to go wrong to bring GDP growth to a standstill.

“In that regard, wait-and-see remains the most likely ECB monetary policy stance.”



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