The US think tank’s leading economic index (LEI) for the euro area fell by 0.7 per cent in July to 96.7, following a similar 0.7-per cent drop in June. The LEI contracted by 3.6 per cent over the six-month period between January and July—a lower rate of decline than the 5-per cent contraction over the previous six-month period.

Its coincident economic index (CEI) for the zone inched up by 0.1 per cent in July to 108.7, the same growth rate as in June. The CEI grew by 0.5 per cent over the six-month period from January to July—slightly up from the 0.2-per cent growth over the previous six-month period.

The LEI provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, while the CEI offers an indication of the current state of the economy.

“The LEI for the Euro Area fell again in July, continuing the downward trend that began in March 2022,” said Ian Hu, economic research associate at the think tank in a release.

“All components, but the systemic stress indicator, contributed negatively to the LEI in July. The negative yield spread, weak orders indicators, and depressed consumer expectations weighed on the leading index in each of the past sixteen months,” she said.

“Consequently, the trajectory of the Index semi-annual and annual changes remained strongly negative and recession risks elevated. However, further monetary easing by the ECB [European Central Bank] in September and December is expected to help curb growth headwinds going forward,” she added.

Fibre2Fashion News Desk (DS)