Through 1Q2013, the Eurozone economy has shrunk for six consecutive quarters. This has been the longest recession in the Eurozone’s (albeit short) history. As the region struggles with weak external demand, tight fiscal and monetary policy, and a collapse in domestic consumption, the eventual recovery will be slow and protracted.
Despite the grim outlook, recently there has been cause for optimism. Several activity indicators from across the continent suggest the cyclical trend has stopped deteriorating. Most encouraging is the sharp improvement in the index of leading indicators (LEI) published by the Organization for Economic Cooperation and Development (OECD). The LEI points to a directional turn in activity in 2H2013 in line with forecasts from the European Central Bank (ECB).
Please review our Dashboard – Eurozone in which we analyze the recent economic trends in Europe and their impact on broader activity: Dashboard – Eurozone