The European Central Bank’s chief economist, Peter Praet, reaffirmed confidence in the euro area’s economic growth despite gloomy economic data.
Factory orders in Germany fell for a third month in a row, Destatis’ data showed.
Investor confidence investors in the euro area deteriorated for the fourth consecutive month in May. The Sentix index dropped to 19.2 from 19.6 points in April.
IHS Markit said its composite purchasing manages’ index for the eurozone fell to 55.1 in April from the March level of 55.2, the lowest in 15 months. The figures indicate a weakening of the economic momentum after the GDP grew at its fastest pace in a decade in 2017.
Praet acknowledged the weakness came “sooner than anticipated” and suggested that it could be a consequence of structural factors.
Another risk is a protectionist spiral, which could damage confidence even before there will be an effect from new tariffs.
Praet said that the evidence for the stronger euro to curb exports over the past year is “limited,” though he noted that the “sharp decline in some sentiment indicators relating to the export sector is a source of concern.”
