Alexa
  • Directory of Taiwan

Euro inflation calms to 1.8 percent in April as industry confidence climbs

Euro inflation calms to 1.8 percent in April as industry confidence climbs

Inflation in the 13 nations that use the euro calmed to 1.8 percent in April as a business climate weather vane climbed to an all-time high, according to figures published Monday.
The EU statistics agency Eurostat reported in a first estimate that inflation eased slightly from 1.9 percent in March _ well under the European Central Bank's guideline of just under 2 percent and adding to expectations that it will be in no rush to raise interest rates from the current 3.75 percent.
Eurostat will confirm the inflation figure and publish more details on price changes on May 16, just after the next ECB meeting on May 10.
The European economy is enjoying what Bank of America economist Holger Schmieding called a "Goldilocks scenario" of solid growth with modest inflation, saying the euro area seems to be weathering "surprisingly well" its currency's strength against the U.S. dollar and Japanese yen, rebounding oil prices and slowing U.S demand.
He blamed a blip in energy prices in April last year for the slight drop in inflation this month, saying inflationary pressures are likely to firm over the next twelve months, building a case for the ECB to raise rates again to 4 percent but not likely beyond that this autumn.
Bear Stearns' chief European economist David Brown agreed that the rate should stay at 4 percent this year.
The euro-area economy looks like it is keeping up recent strong growth as the European Commission's business climate indicator hit a high of 1.61 in April, up from 1.54 in March, with industry managers saying they were more optimistic about total order books, recent production trends and production expectations in the months ahead. Expectations on export orders stayed stable.
"This augurs well for continued strong industrial production growth in the first two quarters of 2007, in line with the pickup recorded in February," the EU's executive arm said.
It will announce its forecast for how the euro economy is doing on May 7, hinting that it may predict faster growth than the 2.4 percent figure for the year it published in February.
But confidence among consumers and different business sectors is more mixed across Europe, with the Commission's economic sentiment indicator edging down slightly to 111 from 111.1 a month ago.
Germans were more upbeat from March, but Spain, Italy and Britain were more pessimistic, it said.
Industry confidence remained high, with Italian managers becoming markedly more optimistic while German and French business leaders said their views were unchanged. Spanish and British managers were slightly less confident.
Consumer sentiment was unchanged, staying on an upward track it started two years ago _ although people still say they are reluctant to make large purchases. In April slightly more people said they planned to build a house or make home improvements in the next 12 months but fewer said they would buy a car.
The euro-zone retail, services and construction sectors also reported no change to their confidence levels.


Updated : 2021-05-08 09:17 GMT+08:00