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Trends
FINANCIAL CONDITIONS
IN THE EURO AREA
In the three-month period from December 2009 to February 2010 shortterm interest rates declined. The three-month EURIBOR rate
decreased from an average 0.71% in December 2009 to 0.66% in
February 2010. Yet the ten-year bond yields grew from 3.88% in
December 2009 to 4.11% in February 2010. In the same period of time
the yield spread increased from 3.17% (December 2009) to 3.45%
(February 2010).
The German stock index DAX declined in February 2010, averaging
5,598 points compared to 5,957 points in December 2009. The Euro
STOXX also decreased from 2,908 in December 2009 to 2,727 in
February 2010. The Dow Jones International declined as well, averaging
10,215 points in February 2010 compared to 10,433 points in December
2009.
The annual growth rate of M3 decreased to – 0.4% in February 2010,
from 0.1% in January 2010. The three-month average of the annual
growth rate of M3 over the period from December 2009 to February 2010
stood at – 0.2%, unchanged from the previous period.
Between April and November 2009 the monetary conditions index
remained rather stable after its rapid growth that had started in mid2008. Yet the index started to grow again since December 2009, signalling greater monetary easing. In particular, this is the result of
decreasing real short-term interest rates
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Trends
EU
SURVEY RESULTS
According to the first Eurostat estimates, GDP increased by 0.1% in
both the euro area (EU16) and the EU27 during the fourth quarter of
2009, compared to the previous quarter. In the third quarter of 2009 the
growth rate had amounted to 0.4% for the euro area and 0.3% for the
EU27. Compared to the fourth quarter of 2008, i.e. year over year, seasonally adjusted GDP declined by 2.1% in the euro area and by 2.3%
in the EU27
In March 2010, the Economic Sentiment Indicator (ESI) for the EU27
and the euro area (EU16) continued to improve. In this month the ESI
increased by 2.0 points in the EU27 and by 1.8 points in the euro area,
to 99.6 and 97.7 respectively. The ESI is now close to its long-term average, albeit it will still require further improvement for the economic
activity to reach its pre-crisis level.
* The industrial confidence indicator is an average of responses (balances) to the
questions on production expectations, order-books and stocks (the latter with
inverted sign).
** New consumer confidence indicators, calculated as an arithmetic average of
the following questions: financial and general economic situation (over the next
12 months), unemployment expectations (over the next 12 months) and savings
(over the next 12 months). Seasonally adjusted data.
Managers’ assessment of order books improved from – 42.8 in January
to – 38.7 in March 2010. In December 2009 the indicator had reached
– 46.8. Capacity utilisation increased to 72.9 in the first quarter of 2010
from 71.6 in the previous quarter.
In March 2010, the industrial confidence indicator increased by 2 points
in the EU27 and by 3 points the euro area (EU16), while the consumer
confidence indicator decreased by 1 point in the EU27 but remained
unchanged in the euro area. However, these indicators stood below the
long-term average in both areas in March.
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CESifo Forum 1/2010
Trends
EURO AREA
INDICATORS
The Ifo indicator of the economic climate in the euro area (EU16)
improved in the first quarter of 2010 for the fourth time in succession.
Both the assessments of the current economic situation as well as the
expectations for the coming six months brightened noticeably. The latest
results are an indication that the economic recovery that became evident
already in mid-2009 will continue in the first half of 2010.
The exchange rate of the euro against the US dollar averaged 1.37 $/€ in
February 2010, a decrease from 1.43 $/€ in January. (In December 2009
the rate had amounted to 1.46 $/€.)
Euro area (EU16) unemployment (seasonally adjusted) amounted to
9.9% in January 2010, the same as in December 2009. It was 8.5% in
January 2009. EU27 unemployment stood at 9.5% in January 2010,
unchanged compared to December 2009. The rate was 8.0% in January
2009. In January 2010 the lowest rate was registered in the Netherlands
(4.2%) and Austria (5.3%). Unemployment rates were highest in Latvia
(22.9%) and Spain (18.8%) in January 2010.
Euro area annual inflation (HICP) was 0.9% in February 2010, compared to 1.0% in January. A year earlier the rate had amounted to 1.2%.
The EU27 annual inflation rate reached 1.4% in February 2010, down
from 1.7% in January. A year earlier the rate had been 1.8%. An EUwide HICP comparison shows that in February 2010 the lowest annual
rates were observed in Latvia (– 4.3%), Ireland (– 2.4%) and Lithuania
(– 0.6%), and the highest rates in Hungary (5.6%), Romania (4.5%) and
Poland (3.4%). Year-on-year EU16 core inflation (excluding energy and
unprocessed foods) fell to 0.8% in February 2010 from 1.0% in
December 2009.
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