29-Aug-2011 9:13 AM

Euro area to see continued modest expansion of economic activity in 2H2011: The Conference Board

Euro Area's Leading Economic Index (LEI) increased (26-Aug-2011) 0.3% in Jul-2011 to 108.8 (2004 = 100), following 0.1% decreases in May-2011 and Jun-2011, according to The Conference Board. The Coincident Economic Index (CEI), which measures current economic activity, increased 0.1% in Jul-2011 to 102.8 (2004 = 100) according to preliminary estimates. The CEI decreased 0.3% in Jun-2011 after remaining unchanged in May-2011. [more]

The Conference Board: “July’s pickup of the LEI for the Euro Area is mostly driven by the contribution of the interest rate spread and real money supply, just as in the United States during the same month. But the overall increase in the LEI was too small to counterbalance the loss of momentum in the leading indicators in the first half of 2011. A continued modest expansion of economic activity remains the most likely scenario for the second half of the year. However, tighter financial conditions and a new round of budget cuts significantly increase the downside risks. As policy options to support growth are shrinking, the main challenge will be to avoid policy mistakes," Jean-Claude Manini, Senior Economist for Europe. Source: Company Statement, 26-Aug-2011.

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