Euro zone Struggles for Growth

Euro zone under pressure.Euro zone’s growth resumes being at its weakest level since last year, an indication that the region struggles to regain momentum.

The slowdown, which increased the policymakers’ concerns, deepened as the firms are offering bigger discounts despite their rising costs.

Germany‘s services industry, amid the signs that Europe’s largest economy is losing steam, resumed its weakest growth for three consecutive years.

On the other hand, the economies of Italy, France, and Spain accelerated the most.

Euro zone’s outlook remains weak

According to Peter Dixon, Commerzbank’s economist, the euro zone’s economy is moving slowly with no any signs of acceleration in place.

The policies introduced and implemented by the European Central Bank don’t seem to be stimulating growth.

Euro zone’s Markit final PMI was below 53.2, July’s reading, and the estimated 53.3., thus having reported a 52.9 outcome in August.

Furthermore, the loosened monetary policy in reaching the 2% target for inflation was proven a failure and was only 0.2% in August.

The euro region’s dominant service industry resumes wane, as the PMI was below July’s 52.9 reading, matching June’s 17 month-low, settling at 52.8.

The service firms’ optimistic outlook remains gloomy without any significant changes since 2014. The business expectations index was lower compared to July’s 60.9 reading having settled at 60.7.

Moreover, the euro zone’s economy was able to recover from the monetary shock following the Brexit outcome, despite the continuation of the pressures on the European Central Bank, Stephen Brown, Capital Economics economist, stated.

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