Eurozone Sentix Investor Confidence Weakens In May

Eurozone investor confidence weakened notably in May wiping out expectations for an economic revival after the war in Ukraine, although the currency bloc weathered the winter months, a closely watched survey revealed Monday.

The investor confidence index unexpectedly fell to -13.1 in May from -8.7 in April, the behavioral research institute Sentix said. The score was forecast to improve to -8.0.

Both current situation and expectations indicator declined from April.

The drop in the expectations component was particularly marked. At -19.0, the expectations index was down from -13.0 in April. The latest score was the lowest since December 2022.

The current situation index declined to -7.0 from -4.3 in the previous month.

The unseasonal weakness is surprising, the think tank observed. Although the economy weathered the winter months better than many feared in the fall, the energy shortage problems remains in perennial. Stubbornly high inflation continued to hamper consumer spending.

The mix makes for a poor economic mood. “The economic recovery, which is built on feet of clay, is thus beginning to falter,” Sentix said.

Investor confidence in Germany deteriorated in May after improving a month ago as the negative effects of high inflation and weakening purchasing power became more visible. The investor sentiment index plunged to -14.5 from -6.9 in the previous month.

The untypical seasonal decline in the situation score to -9 points brings back the topic of recession into focus, the think tank said. At the same time, the expectations index slid to -19.8, the lowest since late 2022, from -11.5 in April.

Source: Read Full Article