Regaining economic growth is a challenging task, especially for Europe. However, the European countries are not giving up and are ready to demonstrate early signs of a recovery.
According to analysts, the euro area economy is showing tentative signs of a rebound and rising inflationary pressures, which may force the European Central Bank to keep the interest rate unchanged, at a fairly high level.
S&P Global said that its composite PMI, an indicator providing valuable insights into overall economic health, increased to 47.9 in January, marking the best reading since July 2023. However, it remained below the 50-point threshold separating growth from contraction.
Data also showed that EU spending grew faster than income in the first month of 2024. At the same time, the index measuring demand rose sharply but stayed firmly below breakeven. The output price index advanced to 54.2 points.
This indicates that the European Central Bank is hesitant to cut interest rates. With input and output prices in the services sector rising, the regulator is unlikely to start easing monetary policy. In addition, a PMI covering the bloc's dominant services industry plunged to 48.4.
