BRUSSELS, April 29 Euro zone economic sentiment
deteriorated slightly in April defying market expectations of
further improvement, while inflation expectations among consumer
and companies alike continued to fall, European Commission data
showed on Tuesday.
The monthly Commission survey showed that economic sentiment
in the 18 countries sharing the euro eased to 102.0 in April
from 102.5 in March, mainly because of a dip in confidence in
the construction sector and in services.
Economists polled by Reuters had expected an improvement to
103.0 in April.
"The slight decrease in sentiment was mainly due to a
worsening of confidence in services and construction, which are
the two sectors where confidence still scores below its
long-term average," the Commission said.
"In industry and retail trade, sentiment remained virtually
unchanged compared to March. Confidence among consumers
improved," it said.
Consumer inflation expectations 12 months ahead fell to 7.5
points in April from 10.8 in March, continuing a steady decline
since last October.
Selling price expectations among manufacturers fell to -1.4
in April from -0.7 in March and -0.2 in February.
Inflation in the euro zone has been stuck in what the
European Central Bank calls the "danger zone" below 1 percent
year-on-year since October, mainly because of falling energy
prices and food and the appreciation of the euro.
This creates a risk of deflation, and the ECB has said that
if the euro exchange rate appreciated further, it would respond
with monetary policy so as to keep the overall policy mix
Separately, the Commission's business climate indicator,
which points to the phase of the business cycle, fell to 0.27 in
April from 0.40 in March.
"Managers' evaluation of the past and expected production,
as well as of the current level of export order books worsened,
while their assessment of overall order books improved and their
appraisal of the stocks of finished products remained broadly
unchanged," the Commission said.
(Reporting By Jan Strupczewski; editing by John O'Donnell)