Euro zone economic sentiment improved in December for the first time since the start of the war in Ukraine, European Commission data showed on Friday, with more optimism across all sectors of the economy and a sharp drop in inflation expectations.
The Commission’s monthly economic sentiment index rose to 95.8 in December from 94.0 in November, the first upward movement after a slide from a record high of 114.0 scaled in February, the month Russia invaded Ukraine.
The mood in industry improved to -1.5 from -1.9 and the sentiment in the services sector, the euro zone’s biggest contributor to growth, more than doubled to 6.3 from 3.1. Consumers, retailer’s ad the construction industry were also all more optimistic, signalling that the expected economic slowdown in the last three months of 2022 and the first three months of 2023 is likely to be a shallow one.
Also, inflation expectations 12 months ahead among consumers fell sharply in December to 23.7 points from 29.9 points in November and manufacturers’ selling price expectations fell to 38.4 points from 40.4 in November.
Higher fuel sales
Separately, euro zone retail sales rebounded more than expected in November thanks to higher fuel sales at petrol stations, the European Union’s statistics office Eurostat said.
Eurostat said the volume of retail sales in the 19 countries sharing the euro last November rose 0.8 per cent month-on-month, rebounding from a 1.5 per cent slump the previous month, for a 2.8 per cent year-on-year decline. Economists polled by Reuters had expected a 0.5 per cent monthly rise and a 3.3 per cent year-on-year fall.
The volume of sales of automotive fuel in specialised stores rose 1.0 per cent month-on-month in November, and 4.4 per cent year-on-year helping to limit the downward pull on the index from falling sales of other products.