Eurozone economic sentiment in surprise rise

EUROZONE economic sentiment rose unexpectedly this month and consumer inflation expectations eased, data showed yesterday, pointing to continued economic recovery.

A monthly European Commission survey showed sentiment in the 16-country currency area rose to 103.2 points from August’s upwardly revised 102.3. Analysts polled by Reuters had expected the index to drop to 101.2. “A lot of the second quarter momentum has been carried over into the third quarter. The recovery seems to be broadening not only in several countries, but also across the eurozone,” said ING analyst Carsten Brzeski.

The eurozone economy grew 1.0% in the second quarter, but economists expect growth to falter in the second half of the year as domestic demand wanes, dented by the austerity drive to ward off a sovereign debt crisis. External demand is aalso likely to be hit by falling demand for foreign goods in China and the United States. Analysts said growth would become self-sustaining for longer only if consumers start spending more, but the data showed sentiment among consumers was steady at -11 in September.