Euro Area: Economic sentiment strengthens in December

Euro Area Economic Sentiment December 2023

Euro Area: Economic sentiment strengthens in December

Sentiment in the Eurozone rose to 95.6 in December from 93.8 in November. Consequently, the index remained entrenched below its long-run average of 100, signaling persistent albeit moderating pessimism.

Sentiment in the services, industry, construction and retail trade sectors improved, as did consumer confidence. Meanwhile, selling price expectations rose in the retail trade and industry sectors, as well as in the services and construction sectors. Moreover, employment expectations strengthened.

In terms of specific countries, sentiment improved in Germany, Italy and Spain while it fell in France and the Netherlands.

Commenting on the release, Peter Vanden Houte, economist at ING, stated:

“Even though the average level of the sentiment indicator in the fourth quarter was slightly above the third quarter, we still pencil in a small negative growth figure in the last quarter of 2023. But in the first half of 2024, a gradual recovery is likely to unfold, as the inventory correction comes to an end and real disposable incomes increase on the back of lower inflation.”

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