LONDON–A double dose of positive economic news yesterday showed that the recovery of the 18-country eurozone pushed up a gear at the start of 2014 and in the period before the crisis in Ukraine escalated.Since it emerged from its longest-ever recession last summer, the eurozone recovery has been muted, with a number of the countries that use the euro hobbled by austerity measures their governments have taken to get their public finances into shape and allow them to return to financial markets to borrow money.
The figures released yesterday suggest growth is accelerating, to the likely relief of policymakers at the European Central Bank who have been mulling whether to do more to stimulate the recovery at the same time as trying to ward off the risk of deflation–a sustained fall in prices that can strangle growth.
Most notably, a survey from financial information company Markit suggested that economic growth in the eurozone accelerated to a 32-month high in February, largely on the back of the services sector and strong growth in Germany, Europe's largest economy.And in a sign that Europe's indebted countries maybe over the worst, Markit found that Spain is enjoying its best quarter in seven years, while Italy is growing at a near three-year high.
Markit's composite purchasing managers index–a broad gauge of business sentiment–rose to 53.3 points in February.That was up from the initial estimate of 52.7 and ahead of January's 52.9.Anything above 50 indicates growth."The survey suggests the region is on course to grow by 0.4-0.5 per cent in the first quarter, which would be its best performance for three years," said Markit's chief economist Chris Williamson.
In the final quarter of 2013, the eurozone grew by a quarterly 0.3 per cent, which equates to an annualised rate of around 1.2 per cent.
AP