Even before a potential knock to economic sentiment from the Brussels attacks, confidence across the 19-country eurozone was already on the wane.
A survey from the European Union’s executive arm showed that economic confidence across the bloc fell in March for a third month running to a 13-month low, the latest in a run of figures to indicate that the recovery is losing pace.
In its monthly assessment, the European Commission said its economic sentiment indicator fell 0.9 points to 103.0 in March. That was a bigger fall than anticipated and has reinforced worries about the economy.
The Commission said the deterioration in sentiment was due to lower confidence among consumers as well as managers in the services and construction sectors. It was also fairly broad-based across countries, with Italy and France faring particularly badly. Germany, the region’s biggest economy, held up better.
Few economists think the eurozone economy will fare much better in the coming months regardless of any negative repercussions stemming from the Brussels attacks. The Commission noted that the survey was conducted before the March 22 attacks on the Brussels airport and subway that killed 32 people.
The factors likely to weigh include the uncertainty in financial markets, worries over the Chinese economic slowdown and a rise in U.S. interest rates.
Capital Economics’ senior European economist, Jennifer McKeown, estimates that the Commission survey indicates eurozone economic growth has slowed from the 1.6 percent annual tick recorded at the end of 2015 to about 1.3 percent. The European Central Bank may have “more work to do” in light of the further fall in eurozone consumers’ inflation expectations, she said.
This month, the ECB announced a further stimulus package in an attempt to get the eurozone economy going and to push inflation, in particular, back up toward its target. The ECB wants inflation to hover just below the 2 percent mark, but it’s been way below that for years. At last count, in the year to February, it was minus 0.2 percent. The first estimate of inflation in March, due to be released Thursday, is not expected to show much change.