Commenting on Eurozone PMI data, Christoph Weil, analyst at Commerzbank said the 16-nation bloc will expand strongly in the second half of 2009. The industry is benefiting primarily from the reversal of the inventory cycle and recovering external demand. The situation seems to have eased in the service sector too.
The Flash Eurozone Composite Output Index rose to 50 in August from 47 in July. The manufacturing sector climbed to 47.9 in August and the services PMI came in at 49.5.
Analyst said the next ECB move will be to hike interest rates. To minimize the risk of choking off the economic recovery, the central bank would possibly wait until summer. Aftershocks of the financial crisis will be felt for some time yet. Once the inventories have been restocked, the euro area economy will expand much more slowly again. At 1.5% in 2010, the growth in the Eurozone economy would still fall short of its long-term average.
For comments and feedback: editorial@rttnews.com