Eurozone: Economic sentiment indicator falls to 107.3 in December - ING
Peter Vanden Houte, chief economist at ING, notes that the Eurozone’s economic sentiment indicator fell in December 2018 to the lowest level since January 2017.
“The European Commission’s economic sentiment indicator (ESI) fell back to 107.3 in December 2018, from 109.5 in November. The outcome was worse than expected (consensus estimate 108.2). France, on the back of the Yellow Vest protests, saw a significant decline (-2.0), but amongst the bigger countries, Germany (-1.9), Italy (-1.4), the Netherlands (-0.3) and especially Spain (-3.0) also saw a drop in confidence.”
“Let’s not beat about the bush: this is a bad report, signalling a weak fourth quarter and not promising much better for the first quarter of 2019. These figures confirm our view that the GDP growth forecast for 2019 that the ECB issued only a few weeks ago (1.7%) will have to be downgraded significantly. That strongly reduces the probability of a rate increase this year.”