Monday September 17 2018
Eurozone August Inflation Rate Confirmed at 2%
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The annual inflation rate in the Euro Area was confirmed at 2 percent in August 2018, slightly below the previous month's five-and-a-half-year high of 2.1 percent, as prices rose at a softer pace for services, energy, non-energy industrial goods and unprocessed food.

Prices rose at a softer pace for services (1.3 percent vs 1.4 percent in July); energy (9.2 percent vs 9.5 percent); non-energy industrial goods (0.4 percent vs 0.5 percent); and unprocessed food (2.5 percent vs 2.6 percent). Meanwhile, processed food, alcohol & tobacco inflation was unchanged at 2.4 percent.

Among Eurozone's largest economies, the highest annual rate was registered in France (2.6 percent), followed by Spain (2.2 percent), Germany (1.9 percent) and Italy (1.6 percent). 

Annual core inflation, which excludes volatile prices of energy, food, alcohol and tobacco and at which the ECB looks in its policy decisions, was also confirmed at 1 percent in August, below the previous month's final reading of 1.1 percent.

On a monthly basis, consumer prices rose 0.2 percent in August, rebounding from a 0.3 percent fall in July and matching market consensus.




Friday September 14 2018
Euro Area Trade Surplus Falls in July
Eurostat | Joana Taborda | joana.taborda@tradingeconomics.com

The trade surplus in the Euro Area declined to EUR 17.6 billion in July of 2018 from EUR 21.6 billion a year earlier and compared with market expectations of EUR 18 billion. Imports jumped 13.4 percent year-on-year to EUR 177.1 billion, the second-highest value on record. Exports rose at a softer 9.4 percent to EUR 194.6 billion. Intra-Euro Area trade rose to EUR 162.3 billion, up by 9.3 percent compared with July 2017.

In the first seven months of the year, exports of goods went up 4 percent year-on-year to EUR 1319.3 billion, while imports rose 5.1 percent to EUR 1200.8 billion. As a result the Euro Area trade surplus narrowed to EUR 118.5 billion from EUR 125.3 billion. Intra-Euro Area trade rose to EUR 1143.3 billion, up by 6% percent compared with January-July 2017.

Considering the European Union, exports went up 9.6 percent year-on-year to EUR 170.4 billion and imports jumped 15.4 percent to EUR 170.4 billion, sharply narrowing the trade surplus to EUR 0.1 billion from EUR 7.8 billion in July 2017. Intra-EU28 trade rose to EUR 288 billion, up by 8.7 percent compared with July 2017.

In January to July 2018, the EU28 recorded a deficit of EUR 4.1 billion, compared with a surplus of EUR 6.3 billion in January-July 2017. Exports of goods rose 3.6 percent to EUR 1127.2 billion, boosted by sales of machinery and vehicles (2.1 percent), other manufactured goods (3.8 percent), chemicals (6.2 percent), energy (11.5 percent) and raw materials (2.7 percent) while shipments of food and drinks declined 0.4 percent. Sales rose to all main export partners, namely the US (5.3 percent), China (4.5 percent), Switzerland (0.3 percent) and Russia (1 percent). Imports went up 4.5 percent to EUR 1131.2 billion, mainly due to machinery and vehicles (2.2 percent), other manufactured goods (2.1 percent), energy (18 percent) and chemicals (1.8 percent). Purchases of food and drinks declined 1.4 percent. China was the biggest import partner, with purchases rising 2.2 percent; the US was the second highest import partner although imports fell 0.4 percent; Switzerland (-0.6 percent) and Russia (+11.9 percent). 




Thursday September 13 2018
ECB Confirms Halting QE Programme
ECB | Joana Taborda | joana.taborda@tradingeconomics.com

The ECB left its benchmark refinancing rate at 0 percent on September 13th 2018, in line with market expectations and confirmed that the monthly pace of the net asset purchases will be reduced to €15 billion from September to December 2018, and will then end.

The interest rates on the marginal lending facility and the deposit facility also remained unchanged at 0.25 percent and -0.4 percent respectively.

Excerpts from the ECB Introductory Statement:

The incoming information, including our new September 2018 staff projections, broadly confirms our previous assessment of an ongoing broad-based expansion of the euro area economy and gradually rising inflation. The underlying strength of the economy continues to support our confidence that the sustained convergence of inflation to our aim will proceed and will be maintained even after a gradual winding-down of our net asset purchases. At the same time, uncertainties relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility have gained more prominence recently. Significant monetary policy stimulus is still needed to support the further build-up of domestic price pressures and headline inflation developments over the medium term. This support will continue to be provided by the net asset purchases until the end of the year, by the sizeable stock of acquired assets and the associated reinvestments, and by our enhanced forward guidance on the key ECB interest rates. In any event, the Governing Council stands ready to adjust all of its instruments as appropriate to ensure that inflation continues to move towards the Governing Council’s inflation aim in a sustained manner.

This assessment is broadly reflected in the September 2018 ECB staff macroeconomic projections for the euro area. These projections foresee annual real GDP increasing by 2.0% in 2018, 1.8% in 2019 and 1.7% in 2020. Compared with the June 2018 Eurosystem staff macroeconomic projections, the outlook for real GDP growth has been revised down slightly for 2018 and 2019, mainly due to a somewhat weaker contribution from foreign demand.

The risks surrounding the euro area growth outlook can still be assessed as broadly balanced. At the same time, risks relating to rising protectionism, vulnerabilities in emerging markets and financial market volatility have gained more prominence recently.

This assessment is also broadly reflected in the September 2018 ECB staff macroeconomic projections for the euro area, which foresee annual HICP inflation at 1.7% in 2018, 2019 and 2020, which is unchanged from the June 2018 Eurosystem staff macroeconomic projections.




Wednesday September 12 2018
Eurozone Industrial Output Falls for 1st Time in 1-1/2 Years
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Industrial production in the Euro Area edged down 0.1 percent from a year earlier in July 2018, following a downwardly revised 2.3 percent growth in the previous month and missing market consensus of a 1 percent increase. It was the first output contraction since January 2017 mainly due to declines in production of durable consumer goods and energy.

Production of durable consumer goods posted the biggest decline (-2.3 percent vs 1.4 percent in June), followed by energy (-2.1 percent vs -3.4 percent), non-durable consumer goods (-0.5 percent vs 2.3 percent), and intermediate goods (-0.1 percent vs 1.7 percent). On the other hand, capital goods output grew 1.4 percent, easing from a 4.5 percent advance in the previous month.

In the EU28, industrial production went up 0.8 percent in July, following a 2.5 percent gain in June, as output increased at slower pace for capital goods (2.1 percent vs 4.5 percent), intermediate goods (0.6 percent vs 2.1 percent), non-durable consumer goods (0.5 percent vs 2.7 percent), and durable consumer goods (0.3 percent vs 2.4 percent). Energy output, however, continued to contract (-0.9 percent vs -2.6 percent).

Among Member States for which data are available, the highest increases in industrial production were registered in Poland (7.9 percent), the Czech Republic (6.7 percent) and Slovenia (5.9 percent), and the largest decreases in Malta (-6.4 percent), Ireland (-6.2 percent) and the Netherlands (-2.1 percent).

On a monthly basis, industrial output shrank 0.8 percent in July, the same pace as in June and worse than market expectations of a 0.5 percent drop. Output fell for: durable consumer goods (-1.9 percent vs -0.1 percent); non-durable consumer goods (-1.3 percent vs -1.1 percent); and intermediate goods (-0.8 percent vs -0.5 percent). By contrast, there was a rebound in production of both capital goods (0.8 percent vs -1.9 percent) and energy (0.7 percent vs -0.2 percent).

In the EU28, output dropped 0.7 percent in July, following a decline of 0.5 percent in June, due to lower production of non-durable consumer goods (-1.3 percent vs -0.4 percent), durable consumer goods (-1 percent vs -0.1 percent), and intermediate goods (-0.6 percent vs -0.4 percent). On the other hand, energy output rose 0.7 percent, after being unchanged in the previous month; and production of capital goods moved up 0.6 percent, recovering from a 1.3 percent slump in June.

Among Member States for which data are available, the largest decreases in industrial production were registered in Malta (-6.3 percent), Croatia (-5 percent) and Sweden (-4.1 percent), and the highest increases in Denmark (3.6 percent), Ireland (2.8 percent) and Latvia (1.8 percent).




Friday September 07 2018
Eurozone Q2 GDP Growth Confirmed at 0.4%
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The Eurozone economy expanded 0.4 percent on quarter in the three months to June 2018, unrevised from the second estimate and the same pace as in the previous period.

From the expenditure side, positive contributions to GDP growth came from gross fixed capital formation (0.3 percentage points), household final consumption expenditure (0.1 percentage points), government spending (0.1 percentage points) and inventory changes (0.1 percentage points). By contrast, net trade subtracted 0.2 percentage points to GDP growth.

Fixed investment jumped by 1.2 percent in the second quarter, following a 0.3 percent gain in the previous period. In addition, household consumption rose by 0.2 percent (vs 0.5 percent in Q1) and government spending increased by 0.4 percent (vs 0.1 percent in Q1). On the other hand, imports climbed by 1.1 percent, after a 0.3 percent decrease in the previous period, while exports advanced at a slower 0.6 percent, compared with a 0.7 percent drop in Q1.

From the production side, industry output expanded by 0.2 percent (vs -0.7 percent in Q1), boosted by manufacturing (0.4 percent vs -0.8 percent). Also, construction advanced by 0.6 percent (vs 0.9 percent in Q1). Among services, output rose for: trade, transport, accommodation and food service activities (0.5 percent vs 0.7 percent); information and communication (0.6 percent vs 2 percent); financial and insurance activities (0.2 percent vs -0.3 percent); real estate activities (0.1 percent vs 0.5 percent); professional and support service activities (0.7 percent vs 0.9 percent); administration and other public services (0.3 percent vs 0.5 percent); and arts, entertainment and other services (0.1 percent vs 0.4 percent).

Among countries for which data is already available, the GDP growth picked up in Germany (0.5 percent vs 0.4 percent), the Netherlands (0.7 percent vs 0.6 percent), Belgium (0.4 percent vs 0.3 percent), Portugal (0.5 percent vs 0.4 percent), Estonia (1.4 percent vs 0.2 percent), Malta (1.9 percent vs 0.9 percent), Slovenia (0.8 percent vs 0.5 percent) and Slovakia (1.1 percent vs 1 percent). Meanwhile, economic growth was unchanged in France (at 0.2 percent) and Lithuania (at 0.9 percent); and slowed in Italy (0.2 percent vs 0.3 percent), Spain (0.6 percent vs 0.7 percent), Finland (0.3 percent vs 1.2 percent), Austria (0.5 percent vs 0.9 percent), Greece (0.2 percent vs 0.9 percent), Latvia (0.9 percent vs 1.5 percent) and Cyprus (0.8 percent vs 1 percent). 

Compared with the same quarter of the previous year, the Euro Area economy expanded 2.1 percent in the second quarter, slightly below a second estimate of 2.2 percent and after a downwardly revised 2.4 percent growth in the previous period. 

Considering the European Union as a whole, GDP growth was unchanged at 0.4 percent quarter-on-quarter; and eased to 2.1 percent year-on-year (vs 2.3 percent in Q1).





Friday August 31 2018
Eurozone Inflation Rate Slows to 2% in August
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

The annual inflation rate in the Euro Area is expected to ease to 2 percent in August 2018 from the previous month's five-and-a-half-year high of 2.1 percent, missing market expectations of 2.1 percent. Prices should rise at a softer pace for services, energy and non-energy industrial goods.

Looking at the main components of euro area inflation, prices are expected to rise at a slower pace for: services (1.3 percent vs 1.4 percent in July); energy (9.2 percent vs 9.5 percent); and non-energy industrial goods (0.3 percent vs 0.5 percent). Meanwhile, food, alcohol & tobacco inflation should remain unchanged at 2.5 percent, as processed food, alcohol & tobacco inflation stood at 2.4 percent and unprocessed food prices increased at softer rate (2.5 percent vs 2.6 percent).

Annual core inflation, which excludes volatile prices of energy, food, alcohol & tobacco and at which the ECB looks in its policy decisions, is expected to slow to 1 percent in August from 1.1 percent in July, also below market consensus of 1.1 percent.


Friday August 31 2018
Euro Area Jobless Rate Lowest in Near 10 Years
Eurostat | Joana Taborda | joana.taborda@tradingeconomics.com

The unemployment rate in the Euro Area came in at 8.2 percent in July of 2018, the same as in the previous month and the lowest rate since November of 2008. It came in line with market expectations. A year earlier, the unemployment rate was higher at 9.1 percent.

Considering the EU28, the unemployment rate edged down to 6.8 percent from 6.9 percent in June and from 7.6 percent in July 2017. This is the lowest rate since April of 2008. 

16.823 million people in the EU28, of whom 13.381 million in the Euro Area, were unemployed in July 2018, down by 82 000 in the EU28 and by 73 000 in the Euro Area from the previous month. Compared with July 2017, unemployment fell by 1.949 million in the EU28 and by 1.368 million in the Euro Area.

Among the Member States, the lowest unemployment rates in July 2018 were recorded in the Czech Republic (2.3 percent), Germany (3.4 percent) and Poland (3.5 percent). The highest unemployment rates were observed in Greece (19.5 percent in May 2018) and Spain (15.1 percent). Compared with a year ago, the unemployment rate fell in all Member States. The largest decreases were registered in Cyprus (from 10.7 percent to 7.7 percent), Greece (from 21.7 percent to 19.5 percent between May 2017 and May 2018), Portugal (from 8.9 percent to 6.8 percent) and Croatia (from 10.9 percent to 8.8 percent).




Thursday August 23 2018
ECB Policymakers See Slower Growth as Temporary
ECB | Joana Ferreira | joana.ferreira@tradingeconomics.com

ECB officials viewed slower-than-expected growth in the second quarter as temporary and affirmed they were more confident inflation will return to levels consistent with their goal of just under 2 percent in coming months, minutes from the ECB's July meeting showed.

Excerpts from the Account of the monetary policy meeting of the Governing Council of the European Central Bank, held in Frankfurt am Main on Wednesday and Thursday, 25-26 July 2018:

Turning to euro area activity, members concurred with the view that the easing in quarterly real GDP growth in the first quarter of 2018, to 0.4%, had by and large reflected a pull-back from the very high levels of growth recorded in 2017, with activity still exceeding the rate of growth of potential output. While the most recent data entailed the prospect of real GDP growth in the second quarter of 2018 being somewhat lower than embedded in the June Eurosystem staff projections, the expectation was still that this would be largely temporary and that the outlook over the medium term continued to be consistent with solid and broad-based economic growth.

Looking at the main demand components, support for the medium-term growth outlook continued to come from strong consumption fundamentals, notably ongoing employment growth. Reference was also made to the probable boost provided by expansionary fiscal measures in some countries. Business investment was expected to continue to benefit from favourable financing conditions, rising corporate profitability and solid demand. By contrast, the momentum in export demand had eased after performing exceptionally well during 2017, explaining the pull-back observed in overall economic growth.

Overall, members considered that the risks surrounding the euro area growth outlook could still be assessed as broadly balanced, notwithstanding the uncertainties related to global factors, notably the threat of protectionism. The risk of persistent heightened financial market volatility also continued to warrant monitoring.

With regard to price developments, there was broad agreement with the assessment presented by Mr Praet in his introduction. Euro area annual HICP inflation had increased to 2.0% in June 2018, from 1.9% in May, reflecting mainly higher energy and food price inflation. Looking ahead, on the basis of current futures prices for oil, annual rates of headline inflation were likely to hover around the current level for the remainder of the year. Moreover, while measures of underlying inflation remained generally muted, they had been increasing from earlier lows. According to the June Eurosystem staff projections, underlying inflation was expected to pick up towards the end of the year and to increase gradually thereafter. Patience was hence required, given the uncertainties in the baseline inflation outlook. With respect to domestic cost pressures, increasing support for the inflation outlook was seen to come from the ongoing strengthening in wage growth, although it remained to be seen to what extent wage inflation would translate into price inflation over time.

Members broadly shared the view that uncertainties surrounding the inflation outlook had been receding. Developments since the previous monetary policy meeting had confirmed confidence in the continued convergence of inflation to levels below, but close to, 2% over the medium term, although expectations in the SPF for HICP inflation excluding energy and food in 2020 remained below those in the June Eurosystem staff projections.


Friday August 17 2018
Eurozone July Inflation Rate Confirmed at 5-1/2-Year High
Eurostat | Joana Ferreira | joana.ferreira@tradingeconomics.com

Euro area annual inflation rate was confirmed at 2.1 percent in July 2018, up from 2 percent in the previous month and the highest since December 2012. Main upward pressure came from energy and services, while food prices rose at a softer pace.

Inflation picked up for energy (9.5 percent vs 8 percent in June), services (1.4 percent vs 1.3 percent), and non-energy industrial goods (0.5 percent vs 0.4 percent). Meantime, prices of food, alcohol and tobacco rose at a softer pace (2.5 percent vs 2.7 percent), of which processed food, alcohol and tobacco (2.4 percent vs 2.6 percent) and unprocessed food (2.6 percent vs 2.9 percent).

Among Eurozone's largest economies, the highest annual rate was registered in France (2.6 percent), followed by Spain (2.3 percent), Germany (2.1 percent) and Italy (1.9 percent). 

Annual core inflation, which excludes volatile prices of energy, food, alcohol and tobacco and at which the ECB looks in its policy decisions, was also confirmed at 1.1 percent in July, above the previous month's final reading of 0.9 percent.

On a monthly basis, consumer prices fell 0.3 percent in July, compared with a 0.1 percent gain in June and matching market consensus.


Thursday August 16 2018
Euro Area Trade Surplus Narrows in June
Eurostat | Stefanie Moya | stefanie.moya@tradingeconomics.com

The Euro Area trade surplus narrowed to EUR 22.5 billion in June 2018 from EUR 25.7 billion in the same month a year earlier, well above market expectations of EUR 18 billion. Imports rose 8.6 percent and exports increased 5.7 percent.

Exports of goods to the rest of the world advanced 5.7 percent to EUR 198.6 billion in June from EUR 187.9 billion a year ago and imports increased 8.6 percent to EUR 176.1 billion from EUR 162.2 billion in June 2017. Intra-euro area trade rose 7.1 percent year-on-year to EUR 170.7 billion in June.

Considering the first half of the year, the trade surplus declined to EUR 100.7 billion from EUR 103.7 billion in the same period of 2017, as imports went up 3.8 percent to EUR 1023.8 billion and exports grew 3.1 percent to EUR 1124.6 billion.

Meanwhile, the European Union trade surplus widened to EUR 6.9 billion in June from EUR 6.6 billion in the same month a year ago. Exports jumped 8.2 percent to EUR 171.5 billion from EUR 158.5 billion a year earlier, and imports rose 8.4 percent to EUR 164.6 billion from EUR151.9 billion.

In the first six months of 2018, the EU trade deficit increased to EUR 3.9 billion from EUR 1.2 billion in the same period of 2017. Imports edged up 2.8 percent to EUR 960.7 billion driven by higher purchases of energy (14.6 percent), machinery and vehicles (0.9 percent), other manufactured goods (0.8 percent) and raw materials (0.7 percent). In contrast, imports declined for food and drink (-1.9 percent) and chemicals (-0.1 percent). Imports went up mostly from Russia (8.3 percent), Turkey (6.7 percent) and Norway (5.3 percent) while fell from Canada (-6.2 percent), the US (-2.4 percent) and South Korea (-2.3 percent). Exports of goods advanced 2.5 percent to EUR 956.8 billion, boosted by higher sales of energy (7.3 percent), chemicals (5.0 percent) and other manufactured goods (3.1 percent). On the other hand, sales of food and drinks dropped 1.0 percent. Exports grew to Canada (8.4 percent), Turkey and India (7.8 percent), Japan (4.0 percent) and the US and China (3.9 percent).