Eurozone Economic Sentiment At 4-Month Low

(RTTNews) - Euro area economic confidence weakened more than expected to a four-month low in April largely due to the trade tariff threats, survey data from the European Commission showed on Tuesday.

The economic sentiment index declined to 93.6 in April from 95.0 in the previous month. The score was forecast to fall to 94.5.

Sentiment eroded across all sectors in April. Among the big-four economies, morale deteriorated notably in Italy, while it improved slightly in Germany and Spain. At the same time, the indicator remained broadly stable in France.

The industrial sentiment index dropped moderately to -11.2 in April from -10.7 in March. Likewise, the services confidence index slid to 1.4 from 2.2.

Consumer confidence deteriorated as initially estimated in April. The index dropped to -16.7 from -14.5 a month ago.

Confidence among retailers also worsened with the index falling to -8.9 from -7.0 in the previous month. The construction sentiment index weakened to -4.3 from -3.7 a month ago.

Employment expectations remained unchanged in April. The index registered 96.5, the same as in March and remained below its long-run average of 100.

The tariff blast since Donald Trump's 'Liberation Day' has completely wiped out the tentative return of optimism in the eurozone, ING economist Carsten Brzeski said.

The economist expects sentiment as well as economic activity in the currency bloc to remain subdued over the coming months unless there are major changes in US trade policy.

Capital Economics economist Franziska Palmas said the economic sentiment index point to a small hit to the eurozone from US tariffs in April and suggest that growth remained quite weak.

With the drag from tariffs set to intensify, Eurozone GDP is expected to grow barely in the next six months, the economist added.

The preliminary estimate for the euro area GDP is due on April 30. The currency bloc is forecast to grow 0.2 percent in the first quarter.