Manufacturing growth differences raise questions of equity
Differences in growth in various Eurozone member nation economies has led to differences over whether or not the European Central Bank is supporting growth, or is not supporting all member nations equally. New data indicates that while Germany’s industrial sector is continuing to recover, Italian and French manufacturers are seeing slowdowns. The mixed results have resulted in a region-wide slowdown in growth that dropped the Eurozone purchasing managers’ index to 55.5 in January, down from 56.5 in December.
This continuing difference in performance in different parts of the region raises the question of whether the benefits of belonging to the monetary union were reaching all member nations evenly. The French PMI was at 52.4 in January after being at 54.2 in December, its lowest level in almost a year. Meanwhile, the Italian PMI was down from 55.0 in December to 53.5 in January, its lowest level in a full year.
While the major candidates for president in France’s upcoming election are using the figures to accuse the ECB of not supporting growth, the ECB characterizes the differences in economic growth between Eurozone nations as not that different from the differences between US states and considers regional differences to be unavoidable as it focuses more on the possibility of inflation. With output prices up last much at their fastest pace since they began to be monitored in 2002, it is seen as likely that the ECB be raising interest rates yet again.
Discussion Area - Leave a Comment
You must be logged in to post a comment.