Business | Economy
Euro zone sentiment hits record low
Euro zone economic sentiment fell to an almost seven-year low in September but the drop was slightly less than expected, while inflation expectations fell sharply for the second month running, data showed on Monday.
- Reuters
- Published: 01:18 September 30, 2008
Brussels: Euro zone economic sentiment fell to an almost seven-year low in September but the drop was slightly less than expected, while inflation expectations fell sharply for the second month running, data showed on Monday.
A monthly survey by the European Commission for the 15 countries using the euro showed economic sentiment fell to 87.7 points from August's 88.5, but was marginally higher than market expectations of 87.5 points. It marked the lowest reading for the indicator since November 2001, when it came in at 86.6 points.
However, the survey was conducted in the first two weeks of September - before the sharp deepening of the financial market crisis in the wake of Lehman Brothers' collapse on September 15 and the subsequent turbulence. Consumer sentiment remained stable at -19 points as expected and industry sentiment fell to -12 points from -9 points.
The indicator for the services sector, which produces two thirds of the euro zone's gross domestic product, fell to zero from 1 point in August. The falling sentiment signals slowing economic activity and even the risk of a recession.
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