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Eurozone confidence drop raises growth concerns

Eurozone confidence drop raises growth concerns

Economic confidence in the eurozone economy and France GDP indicate the 19-nation economy is headed to a slowdown and the ECB may have intervene soon.

The euro area economic sentiment index released on Tuesday showed a drop in July to the lowest level in more than three years amid deterioration in industry, services and consumer spending.

Flash growth in France signaled deceleration to 0.2 percent in the second quarter from 0.3 percent expansion in the first three months of 2019.

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Following a 0.4 percent growth in the January-March quarter in the euro area, the latest report suggest economic growth would slow to 0.2 percent.

The latest blow came from Germany’s harmonized index of consumer prices (used by the ECB), as it plummeted to 1.1 percent, the lowest since November 2016.

“An ample degree of monetary accommodation is still necessary,” ECB President Mario Draghi said last week after he pointed to lower growth and inflation in the second and third quarters of the year.

As of 13:31 GMT, the euro inched up to $1.1148, amid pressure on the U.S. dollar ahead of tomorrow’s interest rate decision by the Federal Reserve.

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