Eurozone annual inflation slowed more than expected in March, adding to concerns of possible deflation and giving room for the central bank to cut rates further. German unemployment increased in March on declining economic activity. Forecasts issued by the Organization for Economic Co-operation and Development, or OECD, and the World Bank revealed a bleak picture of the global economy in 2009, reflecting the rapid deterioration of global financial and economic conditions.
In its interim economic outlook, the OECD forecast the world economy to contract 2.7% in 2009. At the same time, the World Bank lowered its projection to 1.7% decline from just 0.9% contraction predicted initially.
According to a flash estimate from the Eurostat, Eurozone annual inflation halved to 0.6% in March from 1.2% in February. Inflation has slowed to its lowest level since the launch of euro ten years ago. Economists had expected annual inflation to ease to 0.7% in March.
A report from the Federal Labor Agency showed that seasonally adjusted unemployed persons in the largest Eurozone economy rose 69,000 in March, bigger than 50,000 increase in February. Economists had expected a relatively small increase of 52,000.
Meanwhile, the adjusted jobless rate rose to 8.1%, while economists had forecast the rate to remain at February's revised 8%. On an unadjusted basis, the unemployment rate came in at 8.6%, slightly bigger than 8.5% seen in February.
A report from the Centre for Economic Policy Research, or CEPR, showed that the Eurozone fell into recession since the beginning of 2008.
Germany's Federal Statistical Office said in a report that the ILO jobless rate stood at 7.4% in February, up from 7.3% in January. The agency also reported that wholesale trade turnover in real terms dropped 12.2% year-over-year in February, after falling 11.1% in the previous month.
Official data showed that French housing starts dropped 22.1% year-on-year in the three months to February. This comes after a 20.2% fall in the three months to January.
The French public debt increased EUR 42.9 billion to EUR 1327.1 billion in the fourth quarter, a report from the statistical office INSEE showed. A year ago, general government debt according to the Maastricht definition was EUR 1208.8 billion.
Retail sales in Spain dropped 11.7% year-on-year in February, faster than a 6.2% fall in January, the statistical office INE said. Economists expected a decline of 6.5%.
The Bank of Spain said in a report that the current account deficit decreased to EUR 6.58 billion in January from EUR 12.03 billion in the same month last year.
The Italian statistical office ISTAT said retail sales rose 0.7% year-on-year in January, while economists anticipated 2% fall. The office also reported that consumer price index including tobacco rose 1.2% year-over-year in March, slower than the 1.6% increase in the previous month. The March inflation came in line with economists' expectations.
The Statistical Office of the Republic of Slovenia announced that the consumer price index or CPI rose 1.8% year-over-year in March, slower than the 2.1% rise recorded in the previous month.
Statistics Portugal announced that the retail trade turnover at constant prices dropped 4.8% year-over-year in February, compared with a 0.1% fall in the previous month. Industrial production dropped 13.7% year-over-year in February, after falling 16.6% in January.
Rest of Europe
UK's service sector output fell 1.3% in the three months to January following a fall of 0.8% in the three months to December, the Office for National Statistics said. This is the seventh consecutive three months on previous three months decrease.
Consumer confidence was higher for the second consecutive month in Great Britain, data consolidator GfK NOP said, suggesting that measures to end the recession are starting to take hold. The consumer confidence index came in at minus 30 versus analyst expectations for a score of minus 37 following the minus 35 reading in February.
The Swiss UBS consumption indicator dropped to 0.89 in February from 0.92 last month, the UBS said. The indicator thus continued its downward trend and remained below its long-term average of 1.5 for the fifth consecutive month.
Switzerland's current account surplus totaled CHF12 billion in the fourth quarter, down from a surplus of CHF16.7 billion in the third quarter, a report by the Swiss National Bank said.
Industrial production in Estonia plunged a working day adjusted 30.3% year-on-year in February, compared to a 26.8% drop in the previous month, a report by Statistics Estonia said. The agency also reported that retail sales at constant prices fell a record 18% in February compared with the previous year. The latest decline dwarfed the 10% fall witnessed in the previous month. Further, Estonia's general government budget's deficit stood at 3% of GDP in 2008.
The Estonian economy is expected to contract 8.5% this year, the Finance Ministry reported Tuesday. This was much weaker than the 3.5% decline estimated earlier.
Statistics Denmark revealed in a latest report that the nation's Gross Domestic Product or GDP fell a seasonally and price adjusted 1.9% sequentially in the fourth quarter, revised from a 2% fall reported initially. Economists were looking for a decline of 2%. In the third quarter, the GDP was down 0.4%.
Turkish GDP at constant prices fell 6.2% year-on-year in the fourth quarter, reversing from a revised 1.2% rise in the third quarter. Economists expected GDP to fall 5.4% in the fourth quarter.
The Swedish economy will decline 3.9% this year, which would be followed by a meager 0.9% growth in 2010, the National Institute of Economic Research or NIER said. Further stimulus to demand with both monetary and fiscal policy is required to dampen the effects of the severe economic contraction, the think tank noted.
The NIER also said the consumer confidence indicator dropped to minus 16.5 in March from minus 14.6 in the previous month. Economists expected the indicator to come in at minus 13.8.
Statistics Norway showed that the twelve-month growth in the C2 credit indicator slowed to 9.4% at the end of February from 9.9% at the end of January. The C2 indicator's growth in February was in line with economists' expectations.
Hungary's current account showed a deficit of EUR2.5 billion in the fourth quarter, narrowing from a deficit of EUR2.6 billion in the third quarter, a report by the Magyar Nemzeti Bank said.
The Czech National Bank announced that the M2 money supply grew 8.5% year-on-year in February, slower than an 8.6% rise in the previous month.
Statistics Iceland said that the trade surplus stood at ISK 6.29 billion in the January to February period, compared to a deficit of ISK 35.96 billion in the corresponding period of the previous year.
Georgia's GDP at market prices declined 2.5% year-on-year in the fourth quarter, compared to a 3.9% fall in the previous quarter, a report by Statistics Georgia said.
Statistics Lithuania revised the fall in the gross domestic product for the fourth quarter to 2.2% year-on-year from 2% reported initially. In the third quarter, the GDP rose 2.9%.
The Statistical Office of the Republic of Serbia announced that the GDP rose 5.4% annually in 2008, revised from 6.1% reported initially. The agency also said that the retail price index increased 9.9% year-over-year in March, slower than the 10.7% increase in the previous month. Further, industrial production dropped 19.7% year-over-year in February, after falling 17.1% in January.
Croatia's Central Bureau of Statistics announced that the industrial production declined 7.5% year-over-year in February, after falling 6.8% in January.
Romania's central bank kept its key interest rate unchanged at 10% per annum. The decision was in line with economists' expectations.
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