For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Economic confidence slump underscores Europe's deepening woes

By Religare
|
Economic confidence slump underscores Europe's woes
Economic confidence in the debt saddled Euro area economy fell to the lowest level in two and a half years in May 2012 as the deepening debt turmoil threatens to escalate the economic downturn in the region.
 

The gauge of business and consumer confidence in the 17-member Euro area fell to 90.6 in May 2012 from 92.9 in April 2012, the European Commission said in a report on Wednesday.

Europe's economic slump may deepen with Greece tipped to exit the euro as a change in political leadership in the nation may see the debt saddled economy reject the terms of the bailout accord with international lenders. Greece's exit from the euro may cause severe financial turmoil across the region.

Moreover, surging Spanish borrowing costs are rasing concerns that Euro area's fourth largest economy may need an international bailout as the government struggles to recapitalize the nation's struggling banks.

Manufacturing activity in the Euro area contracted at the fastest pace in 35 months in May 2012 while services output hit a seven -month low, a sign that the debt plagued economy may see a deeper than expected recession in 2012.

Companies are cutting back output, squeezing capital and investment spending, and shedding jobs amid a worsening economic outlook.

The lingering debt crises in Europe and painful austerity measures are squeezing spending in the region. Moreover, soaring unemployment is also curbing consumer spending.

Severe austerity measures including tax hikes and salary cuts undertaken by most Euro area economies including Spain, Italy and Greece are dampening consumer confidence and household spending in the region.

The latest data underscores the gloomy outlook for the Euro area economy.

Read more about: eu
Story first published: Thursday, May 31, 2012, 13:31 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more