The European Commission said Monday that its economic sentiment indicator, which tracks confidence in various sectors of the economy as well as among households, fell to 96.6 from 98.2 in February. The consumer confidence indicator collapsed to -16.3 (from -12.3 in February), hitting its lowest since October 2023.
Economic sentiment in the eurozone deteriorated markedly after peaking in January. The Economic Sentiment Indicator (ESI) fell short of expectations due to pessimism in services, construction and manufacturing. The main reasons were geopolitical tensions, energy risks and increased inflationary pressures, which put the economy on the verge of stagnation.
Consumer inflation expectations jumped by 17.2 points to 43.4 due to a sharp rise in energy prices due to the military conflict. Retail trade is also pessimistic – the indicators deteriorated to -7.2 (previously -5.2).
Industry improved slightly to -7.0, but expectations for selling prices rose to 19.7. For services, the indicator remained stable at 4.9.
The decline was sharper than expected, according to the consensus forecast of analysts surveyed by The Wall Street Journal. The indicator is now even below its long-term average of 100.
The engines of the EU economy have not yet perked up. The largest drop in the index was recorded in France (-3.7) and Spain (-2.4). In Germany, the situation remained relatively stable (-0.1), despite the general decline in the region.
