Rome: The Confidence in Eurozone Economy has boosted up recently. One way Italy is tackling its struggling economy is foreign investment. Pirelli is the latest, in a string of Italian companies, to fall into foreign hands. And Italian’s now have evidence the strategy may be working.
Confidence up in euro zone economy
Both business and consumer morale rose sharply in March. Signalling the Italian economy may be turning a corner after shrinking for the last three years .
Jeremy Stretch is from CIBC. “What we are getting towards is something akin to a more virtuous circle as opposed to the vicious circle that we have been seeing in the euro zone over the last four or five years and I think the Italian backdrop does look appreciably better as a consequence of that.”, he says.
Italy showed the biggest jump in economic sentiment (up 2.4 points,) followed by Germany, Spain and the Netherlands.
And confidence in the euro zone as a whole was close to a four year high (up 1.6 points).
Consumer confidence in Portugal, which exited its bailout almost a year ago, was also up – doubling from February to March. (up 0.6 points).
And even prices seem to be settling down.
In Spain, where deflation has been a problem, the year-on-year decline was its smallest since November. And in Germany consumer prices rose for the first time this year.
“The combination of the cheapening up of the euro, the lower oil costs, the lower funding costs which I think have also helped at a corporate level I think altogether are providing a backdrop which suggests we are past the low point in this economic cycle. And I think that is the positive thing and I think that is in a sense the factor that the markets haven’t yet necessarily cottoned onto the ultimate degree.”, he says.
But politics may yet get in the way with Greece in particular – a potential banana skin.
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