Economic news

Prospects for euro zone’s economy turn less glittery

Business activity in the euro zone continued to pace down last month, revealed a survey published today, and there are signs that this trend is going to hold in the next months.

Growth has eased from the start of this year too, just like inflation. Inflation kept at 1.9% in May, according to today’s official report, which allows the ECB to divert from the ultra-easy monetary policy. Analysts in a survey by Reuters in May said that they expected ECB to end the stimulus program in 2018.

Composite PMI of IHS Markit, which is regarded as a solid indicator of expansion in the euro zone, dove to the worst in a year and a half last month, which is 54.1, whereas April’s level had been 55.1, still it remains higher than 50, a borderline between growing and contracting.

Chris Williamson of IHS Markit said that as the economic indexes have moved down and lack of clarity in political domain has risen, the prospects for the euro zone have lost its luster of the start of this year.

The number of orders decreased, backlogs of business were gathering slower, hiring eased, which pointed to the minimal optimism of companies from the end of 2016, with the future production index sliding to 63.7 from previous 65.7.

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