Tuesday, a European Central Bank policymaker Ewald Nowotny said the central bank would take all available measures to stabilize the inflationary expectations in the euro area and keep them anchored in the positive terrain. In France, consumer confidence improved slightly in April as assessments regarding the past and the future financial positions improved, but unemployment fears are still threatening households.
Governing Council member Ewald Nowotny, who is also the Governor of the Austrian central bank, said, We will keep the interest rate very low for as long a time as is required, and we stand ready to use unconventional measures of quantitative easing to assure European firms and consumers access to credit at appropriate conditions. He also added that he doesn't foresee deflation in the euro area.
Results of the monthly consumer confidence survey conducted by the French statistical office INSEE showed that the sentiment indicator rose to minus 41 in April from a revised minus 42 in March. Economists had expected the indicator to log minus 43, which was the initial estimate for March.
France's Ministry of Ecology, Energy, Sustainable Planning and Development said in a report that housing starts dipped 33.8% year-on-year in the three months to March. This followed a 22.1% drop in the three months ended February.
The INSEE also announced that global and export demand for French manufactured goods fell in the first quarter of 2009 and it is expected to fall further in the second quarter, but in a less pronounced way, results of the latest quarterly business survey showed.
The financial crisis will leave France's public finances in a serious condition given the already high deficit and debt levels, the Organization for Economic Co-operation and Development said in its latest economic survey for France. The country's budget deficit is likely to widen to 6.7% of GDP this year and to 8.3% in 2010, above the currency bloc's deficit ceiling of 3% of GDP, the think tank added.
Unemployment in France increased 2.7% or 63,400 in March from the previous month, the Finance Ministry reported late Monday. The number of unemployed increased to 2.44 million in March. However, the increase in March was smaller than in February and January.
Economic think tank REF said Italy's economy is likely to contract 4% in 2009, severe than a 2.5% contraction forecast earlier. REF forecasts another 0.5% fall in GDP in 2010. Elsewhere, confidence among Italian manufacturers, retailers and service providers rose in April from March, separate reports from economic think tank ISAE showed.
Italy recorded a trade surplus of EUR176 million with the non-EU countries in March, the statistical office ISTAT said. This came after a deficit of EUR722 million in February. The agency also announced that retail sales in Italy declined a seasonally adjusted 0.7% month-on-month in February, reversing a 0.3% growth in the previous month, the statistical office ISTAT said. Economists expected retail sales to fall 0.2%.
The Statistical Office of the Slovak Republic said the producer prices for the domestic market rose 0.5% year-on-year in March, slowing from a 1.8% rise in the previous month. In other news, the economic sentiment indicator moved down 4.4 percentage points to 68.8 in April from the preceding month, which is the lowest reading since the series began in January 1997.
Statistics Finland said in a report that the jobless rate climbed to 8.3% in March from 7.6% in February. Economists expected the rate to be only 7.8%.
Rest of Europe
The latest Distributive Trades Survey from the Confederation of British Industry showed that 44% of retailers reported annual rise in sales volume, while 41% registered fall, resulting in a positive balance of 3% for the first half of April. This was the highest balance since January 2008.
Elsewhere, Bank of England Executive Director for financial stability, Andrew Haldane said more widespread implementation of central counterparties and intra-system netting arrangements are needed to ensure that the financial network is structured so as to reduce the chances of future systemic collapse.
The UBS said its monthly consumption indicator for Switzerland rose to 0.99 in March from a revised 0.89 in February, indicating that the downtrend seen in private consumption halted for the time being. However, the indicator is still below its long-term average of 1.50.
Statistics Lithuania said in a report that the gross domestic product or GDP at current prices slipped 12.6% year-on-year in the first quarter, faster than a 2% fall in the fourth quarter. In a separate report, the statistical office said the turnover of retail trade enterprises dropped 30.8% year-on-year in March.
A survey conducted by Norway's central bank showed that banks tightened the credit standards for corporate loans in the first quarter, and are expected to tighten it further in the second quarter.
Sweden's retail sales fell 1.7% year-on-year in March, after falling 1.4% in February, the Statistics Sweden said. The decline came in line with economists' expectations. Further, the agency reported that producer price inflation in March rose to 4.8% in March from 3.4% in February. The annual rate stood above the consensus forecast of 4%.
The Hungarian Central Statistical Office said the jobless rate climbed to 9.7% in the January to March period from 9.1% in the December to February period. The jobless rate has been rising continuously since the September to November period.
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