The eurozone economy continues to experience a gloomy outlook, as indicated by a recent survey of consumers and managers. According to data from the European Commission, the eurozone sentiment indicator, which measures business and consumer confidence, slipped slightly from 96.3 in December to 96.2 in January. This outcome was even worse than economists had predicted, who had expected a minor improvement. The index now stands below the long-term average of 100.
Consumer confidence took a hit, falling from minus 15.1 to minus 16.1 on the index. This decline was in line with forecasts. On the other hand, industrial confidence showed slight improvement, although it fell short of economists' estimates. Services confidence also experienced some improvement during the period.
Experts are pinning their hopes on consumer spending to drive growth in the eurozone this year, especially as inflation levels out after a sharp increase in recent years. However, there are concerns that industrial output could remain sluggish due to high interest rates and diminishing demand in key export markets.
These latest insights follow a lackluster end to 2023 for the eurozone, with flat growth recorded in the final quarter.
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