Confidence in the euro zone’s economy rose for a fourth straight month in March to its highest since July 2011, a European Commission survey showed on Monday, suggesting the weak euro and lower oil prices are spurring the recovery.
The EC economic sentiment indicator rose by 1.6 points to 103.9, better than the 103.1 economists had forecast and building on a recovery that began in December. Business morale improved by 0.14 points to 2.3.
“The recovery is not only gaining momentum but broadening,” Credit Agricole senior euro zone economist Frederik Ducrozet said. “The ECB’s helping with the euro, you have oil stabilizing and there is no major deflation threat.”
Recover Fragile
Still, the euro zone’s recover is fragile and its economies are diverging. Economic morale in France, the euro zone’s second largest economy rose just 0.4 points in March.
Despite the uncertainty surrounding Greece, the euro zone’s economy finally looks to be leaving behind its crisis after two recessions since 2008, while the ECB’s money printing program is increasing optimism.
The European Commission expects the euro zone’s economy to grow 1.3 percent this year and 1.9 per cent in 2016. That would lag the recovery in Britain and the United States but would offer a welcome sign that the bloc can avoid the economic stagnation and deflation many feared just a few months ago.
Overall, the Commission noted “the marked improvement in industry confidence” as well as in services, retail trade and consumer confidence which all pointed to an improvement in companies’ plans to hire more staff.