11 March 2002, 10:15 OUTLOOK Euro zone data in coming week to confirm fledgling recovery
LONDON (AFX) - Euro zone economic figures in the coming week are
expected to confirm that the downturn reached rock-bottom at the end of
last year and that a fledgling recovery is under way, according to
economists.
They said preliminary GDP figures for the fourth quarter will show
the euro zone economy shrank from the previous quarter and slowed
sharply from a year earlier.
"The fourth quarter of 2001 will be regarded as the bottom in the
euro zone cycle, with an expected 0.2 pct contraction on the quarter
and a sharp slowdown to 0.6 pct on the year," Bank of America economist
Lorenzo Codogno said.
HSBC economists too predicted: "This will be the first quarter of
falling euro zone GDP in the region in the current cycle and almost
certainly the last."
Economists said German retail sales data coupled with French and
Italian industrial output figures are expected to vindicate the view
that the euro zone economy has turned the corner, economists said.
Codogno, like other economists, predicted a modest rebound in
German sales after the 3.4 pct month-on-month plunge.
"All in all, a quick pick-up in spending is not in sight," he
cautioned however.
BNP Paribas economists also warned: "With the pace of improvement
in consumer sentiment likely to be restrained by continued rises in
unemployment, retail sales growth should remain subdued in the coming
months."
BNP Paribas economists noted that France posted a large dip in
industrial output in December, while Italy registered a sharp fall in
November.
"Industrial production is currently enjoying a recovery from such
low levels, with an expected 0.8 pct month-on-month gain in Italy and a
0.5 pct rise in France," they said.
"However, the January year-on-year rate is likely to continue to
show the underlying weakness of industrial activity," they warned.
Codogno said the outlook for the French manufacturing sector has
recently improved "but January's conditions were still rather
depressed".
HSBC economists said of France: "The surveys are pointing to a
recovery starting in the first quarter and we expect a modest rise in
production in January."
On Italy, he said: "The worst appears to be over for industry, but
the recovery is still rather weak."
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