Economic sentiment has improved in Europe despite the continued spread of COVID-19.
Sentiment across the Eurozone improved in December due to less pessimism in industry, although consumer prices fell for the fifth consecutive month because of plunging energy costs.
Economic sentiment in the 19 European countries rose to 90.4 points in December from 87.7 in November, against expectations of a rise to 90.0 points, a European Commission monthly survey shows.
The better reading was mainly due to an improvement in industry to -7.2 from -10.1 and among consumers to -13.9 from -17.6 points.
But despite the increased optimism, consumer prices in December rose only 0.3% month-over-month, putting annual inflation at -0.3%, the same negative level as in the previous three months, the European Union’s statistics office said.
Services became 0.8% more expensive in December compared to November and 0.7% more expensive than a year earlier. Consumers also paid more for food, alcohol and tobacco, but a 6.9% plunge in energy prices and cheaper industrial goods moved the whole index lower.
Separately, Eurostat said euro zone retail sales were far weaker than expected in November as countries across Europe reintroduced pandemic restrictions. Eurozone retail sales dropped 6.1% month-over-month for a 2.9% annualized decline.
