For the past few months many economists have been saying that the Euro crisis is over, that from now on the region would begin to post better and better data as the economic recovery kicked in. Alas today that hope was dealt a blow as industrial production data for the Eurozone came in well below forecasts and the situation in Italy looks set to send that nation back into a political and economic crisis.
According to data released by Eurostat, industrial production across the region fell by 1.5% in July, far worse than the market’s expectations for a decline of just 0.1%. Year-on-year, industrial production tumbled at an annual rate of 2.1% in July. Again the ‘experts’ had been expecting a fall of just 0.1%.
In Italy industrial output plummeted by 1.1% dampening hopes that the country was close to clambering out of its longest recession since the Second World War. The decline marked its worst fall since November 2012. The data was far worse than all estimates made by forecasters with the general consensus being a rise of 0.3%.
“There were no one-off factors at play, output fell in every major sector except textiles and there is nothing here that gives any sign of recovery,” said a spokesman at national statistics bureau ISTAT.
The troubled coalition government of Enrico Letta is now expected to revise down the country’s full-year GDP forecast to -1.8%. The previous forecast of -1.3% was considered unrealistic by all independent forecasters.
Tomorrow’s balance of trade data will give a clearer picture over the state of the Eurozone’s ‘recovery’. If it shows signs of improvement then the Euro is likely to reverse some of the losses it has sustained this week, if not then it will more than likely weaken further.
Current Euro (EUR) Exchange Rates
The Euro/US Dollar Exchange Rate is currently in the region of: 1.3280 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8403
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6328
The Pound Sterling /Euro Exchange Rate is currently in the region of: 1.1899 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6948
(Correct as of 10:30 am GMT)
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