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Eurozone consumers bullish despite Crimea crisis: EU

Brussels: Eurozone consumers and businesses have shrugged off the Crimea crisis and are at their most confident for two and a half years, a survey from the European Commission showed on Friday.

The Commission’s index of consumer and business sentiment for March rose for the 11th month in a row, hitting a 30-month high of 102.4 points.

Sentiment rose strongly in the countries on the edge of the Eurozone where the debt crisis hit hardest. The index was up 2.2 points in Spain and 1.3 points in Italy.

But confidence also rose in the core economies of France (up 0.7 points) and Germany (0.4 points).

Martin Van Vliet, an analyst at ING bank, estimated that this confidence would translate into a growth rate of 0.4 per cent in the first three months of this year — compared to 0.3 per cent in the fourth quarter of 2013.

“The Crimea crisis and slowdown in some emerging market economies has failed to dampen the economic mood in the Eurozone,” van Vliet said in a research note.

However, another Eurozone watcher, Howard Archer from IHS Global Insight, cautioned that the recovery would still be held back by stubbornly high unemployment in the 18-nation bloc, as well as slow wage growth.

“Any improvement in Eurozone consumer spending still seems more likely to gradual rather than pronounced over the coming months as there are still significant constraints in most countries,” he said.

At Capital economics in London, Ben May said that the latest data was another sign that the Eurozone recovery had “built up a little momentum in the early months of the year”.

And at Berenberg Bank, Robert Wood said the Eurozone was “seemingly unflappable” as growth headed towards, and maybe above, the trend level “despite emerging market wobbles and the situation in Crimea.”