The Eurozone economic confidence continues to weaken in March as the region signals more moderate growth. The optimism has weakened in the five largest economies, which dropped the overall index to its lowest level in six months – 112.6 points. This is the third consecutive drop from the 17-year peak reached in December.
The European Commission report is the latest in a series of data that suggest the economic growth in the currency bloc slowed after the biggest enlargement of the decade. The Purchasing Managers’ Index (PMI) showed that activity in the manufacturing and services sector in the Eurozone is accelerating at its slowest 14-month pace, and investor confidence is falling amid rising fears of a trade war.
However, the representatives of the European Central Bank express confidence in the region’s prospects. The financial institution’s President Mario Draghi told the European leaders that investment grow to levels not seen in at least a decade, the private sector debt declined and healthy capital ratios of banks are nearly 50% higher than at the beginning of the crisis.
The Frankfurt-based institution expects the economic growth to accelerate to 2.4% in 2018 from 2.3% in 2017. At the same time, however, the inflation remains below the target of central bankers of around 2%.
The Commission’s data also show that Eurozone economic sentiment deteriorates in the manufacturing, services and retail sectors and the construction indicator is growing. The consumer confidence remains unchanged in March. In a separate report, the ECB said growth in corporate lending slowed in February.