Eurozone economy stuck in ‘malaise’

BRUSSELS (AFP) – The eurozone’s economy remained at a near standstill in December, extending the worst quarterly performance since 2013, said a closely watched survey by the company IHS Markit.

“The eurozone economy closes out 2019 mired in its worst spell since 2013, with businesses struggling against the headwinds of near-stagnant demand and gloomy prospects for the year ahead,” said the firm’s chief business economist Chris Williamson.

The forecast only feeds into the gloom also predicted by the European Central Bank, which downgraded growth in the eurozone for next year to a feeble 1.1 per cent.

IHS Markit said its composite eurozone PMI, a key business indicator, stagnated at 50.6 points in December, unchanged from the previous month.

A reading above 50 points to an expansion. The index’s decline showed business sentiment remained just over the threshold into positive territory.

“The December malaise was once again led by manufacturing, where output slumped at the fastest rate since October 2012,” the report said.

By country, business activity fell for a fourth consecutive month in Germany, where the economy has been destabilised by the United States (US)-China trade war and slumping demand for autos.

France outperformed Germany, though the survey indicated that growth had ticked lower at the end of the year.

The French economy, despite a wave of anti-reform strikes, is “providing a key area of support to help keep the eurozone growing,” Williamson added.

French Finance Minister Bruno Le Maire, however, yesterday said he now expected his country’s economy to grow by just 1.3 per cent this year, down from a previous 1.4 per cent estimate.

This brings the French government’s outlook into line with growth forecasts by both the Bank of France and the Insee national statistics bureau.

File photo of a holiday market in Cologne. The eurozone’s economy remains at a near standstill in December, extending the worst quarterly performance since 2013