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- Martin Van Vliet, senior euro-area economist at ING Groep NV
Activity at manufacturing and services sectors in the Eurozone deteriorated further in March, as the downturn intensified. According to the Markit Economics, a gauge of manufacturing activity across the 17-nation bloc dropped to 46.6 this month, down from 47.9 a month earlier. At the same time, the Eurozone services flash PMI stood at 46.5 in March, compared to a reading of 47.3 in February. Manufacturing output tumbled at the fastest rate since December, business activity in the service sector suffered the steepest fall since October, while new business fell at the sharpest rate in three months. The data reflects the Eurozone economy is likely to fall deeper into recession in the first three months of 2013.
"The data indicate that the Eurozone economy has remained stuck in recession in the first quarter," said Martin Van Vliet, senior euro-area economist at ING Groep NV in Amsterdam. "With fiscal austerity, tight credit and high unemployment set to keep most peripheral economies in recession, the path back to growth will likely be slow and bumpy. Moreover, if the situation surrounding Cyprus spirals out of control the onset of recovery might well be delayed."
"The big issue at the moment is clearly Cyprus," said Ben May, European economist at Capital Economics Ltd. in London.