- Capital Economics
The Euro zone industrial production declined sharply for the second month in a row in March, suggesting that the currency bloc's economic recovery is likely to remain modest despite a stronger start to the year. According to Eurostat, industrial output dropped 0.8% from February, and was just 0.2% higher than in March 2015. The fall was more than the 0.2% drop expected in markets and raises the possibility that the estimate for first-quarter GDP growth will be trimmed in a revision due later today. The Euro zone economy picked up steam in the first three months of the year, growing twice as rapidly as it did in the final quarter of 2015. Economists said the poor showing over the past couple of months is further evidence that the Euro zone is facing a softer economic outlook due to a number of factors, including uncertainty over the state of the global economic recovery, stemming in particular from the slowdown in China.
Meanwhile, consumer prices in the Euro zone's second largest economy, France, posted another month of deterioration in April measured on an annual basis. The cost of living in France decreased 0.2% in April compared to the same period a year ago. In March, the gauge booked a 0.1% decrease.
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