As autumn nears, a majority of global economists remain uncertain about EMEA’s economic future. Countless questions have yet to be answered by even the world’s most renowned financial experts.
Will unemployment continue to uptick throughout the second half of the year – or will it begin to decline to more normal levels? Are businesses and consumers gaining confidence? Will regional spending increase this fall and winter – and is inflation steadily rising or dropping within the region?
The following statistics regarding business and consumer confidence, unemployment, and inflation have recently been released to the general public.
Euro Zone:
During the first week of August, the European Commission released the Euro Zone’s latest business and consumer sentiment index figures. According to the data, July’s index was measured at 87.9, the 12th consecutive month in which it has been lower than its long-term average of 100. In fact, the index has now decreased on a month-to-month basis for four straight months and is currently lower than it has been since 2009. Furthermore, each of the index’s five sub-indices, including industrial, construction, consumer, retail trade, and services confidence, declined from June to July as well, falling to -15, -28.4, -21.5, -15, and -8.5, respectively. The steady declines in regional confidence signify that a minor recession has likely begun within the Euro Zone.
Germany:
As has been the case throughout the first half of 2012, Germany’s unemployment rate remained unchanged in July, holding steady at 6.8 percent, according to statistics recently released by Bundesbank. However, as usual, joblessness continued to fluctuate throughout the nation, varying by region. In West Germany, unemployment was still quite low, although it rose from 5.8 percent in June to 5.9 percent in July. But, within East Germany, joblessness was well above average in July, as the region’s unemployment rate was measured at 10.5 percent, a slight decrease when compared to June’s rate of 10.6 percent. Within the entire region, 2.89 million Germans were without work last month, a decrease of 2.2 percent in comparison to July 2011’s employment figures.
Italy:
Annual inflation rose slightly last month, as Italy’s total Consumer Price Index (CPI) was measured at 106.1, an increase of 0.1 percent when compared to June’s figures. The nation’s CPI also augmented from July 2011 to July 2012, rising by 3.1 percent during that time span. At the same time, the nation’s EU-harmonized CPI index also rose on a yearly basis last month, by 3.6 percent; yet, it declined by 1.7 percent from June to July, the first month-to-month decrease since January. Due to diminishing oil prices and Italy’s ongoing recession, many economists believe the nation’s consumer prices will steadily decline this fall and winter.
Russia:
After two straight months of increases, Russia’s total reserve fund dropped slightly from July to August, falling from RUB1.98 trillion to RUB1.92 trillion. During the last month, the fund has declined by 2.9 percent, yet it currently remains 162.2 percent higher than it was in August 2011. The considerable rise can be pointed directly to the oil and gas revenues the fund received at the beginning of the year – RUB1.09 trillion in all. Despite January’s revenues, the fund is still well below 2008 and 2009’s levels; during the global recession, much of the fund was spent to refuel the nation’s weakened economy. Although the national reserve fund is presently lower than usual, at RUB2.74 trillion, the national welfare fund is still quite high, and will likely remain so throughout the coming months.
Spain:
Even though Spain’s unemployment rate is still above 20 percent, the nation’s business confidence improved slightly from June to July, rising from -19 to -17. The improvement was not anticipated; in fact, many economists projected a decline in confidence. After all, the confidence measurement and three of its sub-indices – investment, intermediate goods, and other goods – have typically decreased on a month-to-month basis since January. Nevertheless, two of the measurement’s sub-indices – investment and other goods – also unexpectedly improved last month, rising to -9 and -24, respectively. Although the recent rise in confidence is certainly welcomed, there are currently no signs that national business confidence will continue to improve during the third and fourth quarters.
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