News

Plenty of Worry About Deflation in the Eurozone

You've probably heard someone say, "There's good news and there's bad news, which do you want me to tell you first?"

Well, in the case of the Eurozone's economy, I'll tell you the good news first: It appears there was a Q1 uptick in economic activity in the Eurozone.

Regarding the bad news, read this excerpt from a March 22 Bloomberg article:

Economic growth in the euro area probably picked up at the end of the first quarter, according to Markit Economics, which also said that concerns remain about the health of the region.

Markit’s composite Purchasing Managers Index of manufacturing and services rose to a three-month high of 53.7 in March from 53 in February. That keeps the measure well above the 50 level that separates expansion from contraction. The reading was also higher than the median forecast of 53 in a Bloomberg survey of economists.

While economic growth in the euro region is being maintained, Markit’s survey pointed to continued weak inflation pressures, with output prices falling again in March. The European Central Bank unveiled new stimulus measures this month as part of its long-running battle to revive inflation in the currency zone.

'Plenty of worrying signs persist,' said Chris Williamson, chief economist at Markit.'“Deflationary pressures also remain stubbornly widespread as a lack of demand led to further discounting in March.'

You can read the entire article by following the link below:
http://www.bloomberg.com/news/articles/2016-03-22/euro-area-deflation-risks-persist-even-as-markit-sees-growth

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