Strengthening outlook and rising growth boosts Eurozone consumption

Eurozone consumer confidence data for March will be released today and is expected to further demonstrate the trend of rising confidence that has highlighted a return of sustained consumer spending to some of Europe’s largest economies

While the last reading in March showed a strong uplift in consumer confidence in the Economic Sentiment Index to 112.6, today’s reading is expected to show a moderate drop to around 112. Readings above 100 are generally considered to be signs of strong consumer demand and a healthy economic outlook. As such, today’s readings highlight the robust nature of Europe’s recovery. Steadily decreasing unemployment in Germany and France is expected to help boost wages in the coming months, particularly as the German public and private sectors conclude the latest enterprise negotiations.

Strong confidence is expected to continue Europe’s recovery and expansion, despite the uncertainty caused by recent trade tensions with the US. Sustained demand will also help lift Eurozone inflation forecasts; however, with internal Eurozone consumption reaching record highs, elevated inflation is not expected to be a concern in the short-term.