- Martin Van Vliet, senior euro-area economist at ING Groep NV
French consumers spending dropped again in February, however, at a slower pace than in the previous month, mainly due to a fall in textile-leather purchases, the INSEE official statistics office said Friday. Households' expenditure on goods, which accounts for the majority of overall economic activity, dropped by 0.2% on a monthly basis in February, after a revised 0.8% drop a month earlier. On an annual basis, consumer spending tumbled 2.9% in February, faster than the 2% decline economists had forecast. Also Friday, a report showed that France's producer price index increased 1.9% on an annual basis in February, above analysts' forecasts, who called for a 1% gain. The latest data are adding to concerns that consumers and businesses are showing unwillingness to increase spending, as renewed tensions in financial markets increased concerns the Euro-region's recovery will falter.
"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
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