And expand Industrial output Demand has risen LendingExpectations in a major German opinion poll also rose more than expected, providing some reassurance after major indicators tended to perform below expectations over the past month.
Recent data is likely to reinforce bets on that Eurozone It will still grow, even if at the slowest possible pace, but it is unlikely to be prevented European Central Bank From a cut in interest rates, which are now almost fully priced in.
Industrial production rose 1.8 percent month-on-month in August, slightly above expectations, and was 0.1 percent higher than a year earlier, driven by growing demand for capital and consumer durables, Eurostat said.
New data showed that industrial production in Germanythe euro zone’s largest economy, rose more than 3 percent on a monthly basis, the largest rise among the region’s major economies, even if the annual rate was still very negative.
This is caused by rising energy costs and tepid demand ChinaIncreasing competition from other producers has weakened German industry in recent years, leading to some questions about the viability of the German industrial-based economic model.
“However, the outlook for the industry remains tepid for the rest of the year,” said Bert Cullen, an economist at ING. “The list of concerns about eurozone industry is long at the moment, and it is very difficult to see the beginning of a sustained and sustainable recovery for the sector at this time.” stage,” according to Reuters.
In another somewhat optimistic sign for the German economy, it improved Investor sentiment More than expected in October with the ZEW economic sentiment index rising to 13.1 points from 3.6 points in September.
The ZEW Center said that expectations of low and stable inflation, bets on further interest rate cuts, and some slight improvement in export demand all contributed to the more positive reading of the index.
She added that China’s recent stimulus measures also provide some hope for both Germany and the eurozone more broadly.
The ECB has cut interest rates twice already this year, and will almost certainly cut them again this week while also holding another move for December as inflation is now within striking distance of its 2 percent target.
This would add a full percentage point of interest rate cuts with another percentage point priced in next year, signaling that investors see the rate being cut in half from its previous high of 4 percent.
Growing demand for loans, a precursor to lasting economic growth, also reflects hopes for lower interest rates.
Demand for bank loans, the main source of private sector financing, rose in the third quarter and a further increase is expected in the last three months of the year, the ECB said based on a survey of major lenders.
The European Central Bank said lower interest rates led to increased demand for business loans but investments had little impact.
