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Weak euro zone data backs Draghi's plan for more stimulus

Video Credit: Reuters Studio - Duration: 01:31s - Published < > Embed
Weak euro zone data backs Draghi's plan for more stimulus

Weak euro zone data backs Draghi's plan for more stimulus

French growth slowed unexpectedly in the second quarter on weaker household spending and German consumer morale worsened for the third month in a row heading into August, adding to signs that the euro zone economy as a whole is cooling.

David Pollard reports.

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Weak euro zone data backs Draghi's plan for more stimulus

France saw hot record temperatures this month but its economic thermometer has been slipping.

A meager 0.2% rise in GDP in Q2 comes on the back of weaker household spending.

In neighboring Germany, it's carmakers that have been feeling the heat, new emissions regulations and global tariffs hitting hard.

Now a new readout on consumer confidence stokes fears that a recession in heavy industry could be spreading.

ECB chief Mario Draghi expressed just such a fear at last week's policy meeting, as he all but promised a rate cut in September.

(SOUNDBITE) (English) EUROPEAN CENTRAL BANK PRESIDENT, MARIO DRAGHI, SAYING: "This outlook is getting worse and worse.

And it's getting worse and worse in manufacturing especially.

And it's getting worse and worse in those countries where manufacturing is very important." Not just Europe is suffering: Japan's central bank on Thursday (July 25) committed to further stimulus, if a global slowdown persists.

And amid the continuing tariff war, China's factories appear set for a 3rd month of contraction.

But for Europe, it could point to further weakness ahead.

Germany's GFK consumer confidence reading is the lowest since April 2017.

And another survey shows euro zone economic sentiment is worse than it's been in three years.

PMI data last week suggests the bloc will expand just 1% or so this year.

GDP readings for the bloc - out Wednesday (July 31) - may show whether even that is hopeful.




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