Throughout 2012, news reports regarding EMEA’s economic situation have generally focused on the same issues – rising unemployment, depreciating monetary units, and high inflation.
But, in the midst of the region’s current recession, are there currently any signs that economic recovery is occurring? Are there any indications that unemployment and consumer prices will decline during the fourth quarter? Has consumer confidence risen in any countries and, if so, is such progress expected to continue?
For answers to such questions, the following report will provide data regarding the region’s present business and consumer confidence measurements, employment situation, and Consumer Price Index statistics.
Prior to the release of the Euro Zone’s latest confidence measurements, Moody’s Analytics predicted the region’s business and consumer sentiment index would rise on a month-to-month basis in September, for the first month since March. However, as a surprise to some economists, the index actually continued to decline, dropping from 86.1 to 85, the sixth consecutive month of decreases. The reduction likely occurred as a result of a deterioration of four of the index’s five sub-indices – industrial, consumer, retail trade, and services, which fell to -16.1, -25.9, -18.6, and -12, respectively. Due to high regional unemployment, as well as the sovereign debt crisis, the sentiment index is expected to remain below its long-term average of 100 until next year’s first quarter, at the earliest.
As projected, Germany’s unemployment rate lingered at 6.8 percent in September, as it has throughout 2012. Of course, unemployment, as usual, did vary according to regions, as West Germany’s jobless rate was measured at 5.7 percent, a 0.3 percent decrease, when compared to August’s rate, while East Germany’s unemployment rate fell from 10.3 to 9.9 percent. Although the decreases were certainly welcomed, each region’s rate is still higher than usual and, despite recent downward trends, there is currently no indication the rates will drop considerably during the fourth quarter. According to Bundesbank, roughly 2.91 million Germans were unemployed in September, a rise of nearly 9,000, in comparison to August’s figures. The total number of jobless citizens has now increased on a month-to-month basis throughout the last six months.
As predicted by some global economists, France’s consumer confidence continued to weaken in September, declining from 86 to 85, the third successive month of decreases. In fact, September’s rate was the lowest that has been recorded since February. Five of the measurement’s sub-indices also fell from August to September, including past and future living standards, while three other sub-indexes – savings intentions, unemployment outlook, and inflation outlook – rose for the second straight month. As a result of high national unemployment, many economists believe consumer confidence will remain below its long-term average of 100 throughout the coming winter months.
According to the State Committee of the Russian Federation on Statistics, the national Consumer Price Index increased by 0.5 basis points last month, rising from 100.1 in August to 100.6 in September. Consumer, food, and nonfood prices also augmented on a year-to-year basis last month, rising by 6.6, 7.3, and 5.4 percent, respectively. The rise in inflation led the nation’s central bank to increase each of its policy rates last month, as the refinancing, overnight deposit, and overnight auction-based repurchase rates rose to 8.25, 4.25, and 5.5 percent, respectively. A majority of economists have forecasted a steady rise in national inflation, especially during the remainder of the fourth quarter.
After lingering at -29 since May, the United Kingdom’s consumer confidence measurement upturned slightly in September, rising to -28, two points higher than its year-ago reading. Although the uptick is welcomed news, especially in the midst of Europe’s ongoing debt crisis, much work remains to be done. After all, the measurement’s long-term reading is -9, more than one-third lower than September’s index. Furthermore, three of the measurement’s sub-indices, past personal financial situation, future general economic situation, and climate for major purchases, remained unchanged last month. But, as a sign of improvement, two sub-indices, future personal financial situation and past general economic situation, rose from August to September, climbing to -8 and -54, respectively.