Eurozone economic confidence grows as recovery strengthens

EUROZONE economic confidence improved as the region bounces back from its mild recession in the second half of last year.

A sentiment indicator published on Thursday (May 30) by the European Commission rose to 96 in May from 95.6 the previous month – just less than analysts in a Bloomberg survey had predicted.

Readings for industrial confidence and services were better than in April, while consumer sentiment was also up.

Growth in the 20-nation currency bloc surpassed expectations in the first quarter, while business surveys by S&P Global last week signalled the recovery is taking hold as private-sector business activity reached its highest level in a year.

The labour market, too, remains strong. Unemployment fell to 6.4 per cent in April from 6.5 per cent the previous month, Eurostat said on Thursday.

The retreat in inflation, meanwhile, is likely to see the European Central Bank lower its deposit rate by a quarter-point next week. It currently stands at a record-high 4 per cent. BLOOMBERG