Eurozone economic sentiment slips from decade high

Frankfurt - Eurozone economic confidence fell for the first time this year, led by weaker readings in the services and retail sectors.

The decline in the index of executive and consumer sentiment, while unexpected, still leaves the measure close to its highest level in a decade. It fell to 109.2 in May from 109.6 in April, which compares with the median estimate in a Bloomberg survey for an increase to 110.

The report will feed into the European Central Bank’s (ECB) discussion next week in Tallinn, where policy makers will assess the health of the 19-nation economy. 

President Mario Draghi has urged patience in outlining an exit strategy from negative rates and a €2.3trn bond-buying programme even as he told European lawmakers on Monday that the upswing is becoming increasingly solid and broad-based.

The decline in the confidence gauge marks the first modest stumble by the eurozone economy, which has shown continued signs of strength this year. IHS Markit, which publishes a monthly activity index, said last week that the economy is growing at a pace that would warrant tighter monetary policy if it wasn’t for weakening inflation.

Eurozone consumer-price growth probably slowed to 1.5% this month from 1.9% in April, economists predicted in a separate survey before a report on Wednesday. Spain’s inflation rate fell more than forecast in May, dropping to 2% from 2.6%, while data later on Tuesday is expected to show a drop in Germany.

The commission said consumers’ confidence was “robust” in May and their outlook for the economy turned more positive. Industry sentiment was “broadly stable,” and the decline in services confidence was due to a worsening of the assessment of past demand and demand expectations.

Read Fin24's top stories trending on Twitter:

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
Rand - Dollar
14.08
+0.4%
Rand - Pound
19.77
+0.5%
Rand - Euro
17.02
+0.2%
Rand - Aus dollar
10.89
+0.3%
Rand - Yen
0.13
+0.2%
Gold
1,825.75
+0.6%
Silver
26.99
-0.0%
Palladium
2,873.00
+0.4%
Platinum
1,206.50
-0.6%
Brent Crude
69.32
+1.1%
Top 40
60,211
-2.1%
All Share
66,169
-1.9%
Resource 10
69,474
-3.1%
Industrial 25
82,513
-1.5%
Financial 15
12,499
-1.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
21% - 1432 votes
No, I did not.
52% - 3595 votes
My landlord refused
28% - 1907 votes
Vote