FRANKFURT (MktNews) - The Handelsblatt leading economic index for the euro zone fell again in February after remaining unchanged in January, thus resuming the downward trend seen since September 2000, according to the Handelsblatt`s Monday edition.
The declining risks for eurozone price stability give the European Central Bank the leeway to cut official interest rates in coming weeks, the Handelsblatt argued.
The German business newspaper's indicator fell to 2.9% in February from 3.0% in January, thus falling below the 3.0% mark for the first time since November 1999, the Handeslblatt said.
In February last year, the index stood at 3.5%. Still, the data suggest that "the eurozone economy remains relatively robust. Worries about a strong setback or even a threat of recession seem unfounded at present," the Handelsblatt said. The decline of the February indicator was caused mainly by a drop in the industrial sentiment index, although consumer confidence also fell somewhat, according to the Handelsblatt. However, industrial production rose slightly and capacity utilisation remained high through the end of the year, the paper added. It also noted that money supply growth rate has continued to moderate, as have consumer inflation pressures. "The declining risks for price stability give the ECB leeway for rate cuts in coming weeks", the Handelsblatt said. The Handelsblatt's index is designed to be a leading indicator of EMU GDP developments, signalling economic activity about three months ahead of time. The Handelsblatt economic indicator index is composed of the EU Commission indexes of industrial and consumer sentiment, seasonally adjusted industrial production (excluding construction), M2 growth, HICP and interest rate differential.