Consumer confidence in Eurozone rose in November to its highest level for the year, outstripping forecasts of economists. The index of the European Commission (EC), which reflects the dynamics of consumer confidence increased to -6.1 points this month. The growth is 1.9 percentage points and significantly exceeded the expectations of economists who had forecast an increase of the index to -7.8 points.
The rise in confidence was greater in the currency bloc than in the European Union as a whole, which includes the UK. EU confidence improved by 0.7 points to reach -5.8.
The data confirm that demand in the Eurozone is a major driver of economic recovery. The consumption, which is supported by lower inflation, overcomes the adverse side effects of votes for Brexit and selection of Donald Trump as the next US president.
The economic growth in the Eurozone slowed to 0.3% in the third quarter and is expected to remain stable in the coming quarters. However, the economy is facing more political risks, including the upcoming referendum and elections in Italy in Austria, Holland, France and Germany in 2017.
Against the background of low inflation, the European Central Bank is set to continue its program of buying assets to support growth and prices in the euro area and after March 2017. However, some analysts expect the slowdown in consumption growth next year.
Of course we should have in mind that the unemployment rate has been flat over the summer months, but the employment outlook has been improving recently as companies are indicating to be hiring at a faster pace in both services and industry.
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