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Omicron weakens expectations for economic recovery in the euro area

Inflation unexpectedly reached 5% last month, hitting record highs in 19 currencies as supply chain bottlenecks reduced the availability of consumer products.

The ECB is unlikely to revisit its policy stance until March, especially as Omicron is clouding the outlook. (Reuters)

Inflation hit a record high, although economic conditions in the euro area fell more than expected last month.

This indicates that the region’s economy is under new stress as the surge in coronavirus infections has forced governments to tighten regulations.

Foreseeing pain, the European Commission’s economic sentiment index, an important indicator of Brock’s economic health, fell sharply from December’s forecast to the level last seen in May. rice field.

As Omicron variants dominate Europe as a whole, infectious diseases break records almost every day, and growth is at the turn of the year, even if the government largely avoids the debilitating measures that stagnated the economy a year ago. You may be hit.

Service outlooks have deteriorated significantly and employment expectations have fallen.

read more: OECD: Omicron threatens global economic recovery

Germany’s slowdown is clear

In Germany, the largest economy in the euro area, supply chain bottlenecks restrained vast factory sectors for most of the last quarter, recovering an industry that was thought to have stumbled unexpectedly in November.

Despite an expected rise of 1%, monthly output fell 0.2%, Europe’s largest economy stopped in the fourth quarter of 2021, and there was no relief for months. Was strengthened.

In a rare bright spot in the block, retailing increased unexpectedly in November. This at least shows that consumers were optimistic as they entered the Christmas shopping season.

The problem is that large household spending, which has been forced to save cash over the past year due to restrictions, has pushed consumer prices to a new record.

read more:
OECD: “We see a global economic recovery”

read more:
Covid will not restore global employment market forecasts until 2023.

Source: TRT World and distributors

https://www.trtworld.com/business/omicron-dampens-hopes-for-euro-zone-s-economic-rebound-53409?utm_source=other&utm_medium=rss Omicron weakens expectations for economic recovery in the euro area

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