Eurozone: Consumption supports growth but not strong enough to foster an acceleration - ING

Following today’s Eurozone consumer confidence data, Peter Vanden Houte, Chief Economist at ING points out that without a more dynamic consumer, it’s hard to see stronger growth in the coming quarters.

Key Quotes:

“Eurozone consumer confidence fell in May to 0.2 from a downward revised 0.3 in April. The strong increase in oil prices in the course of this month might have been one of the factors weighing on confidence.”

“The disappointing performance of consumption in this recovery is not new. Since 2010, only three out of 32 quarters have seen year-on-year growth in consumer expenditure above overall GDP growth in the Eurozone.”

“Consumption as a driving force in the growth story now comes even later in the cycle than usual. But for that to happen both employment and wage growth should have to pick up in the coming quarters and a further slide in sentiment should be avoided. A lot of conditions at this juncture.”