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Eurozone Industrial Production Expected to Rebound After Consecutive Declines

H.S. Borji
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Eurozone Industrial Production Expected to Rebound After Consecutive Declines

Eurozone industrial production rebounded in February following two consecutive months of decline, according to a broad consensus of market analysts anticipating Monday’s release.

Industrial production fell 0.2 percent in January, following a decline of 0.4 percent the prior month, the European Commission’s statistics branch reported last month.

While industrial production had declined in three of the last six months, the January reading did show signs of modest recovery. Compared to the previous 12 months industrial production rose 2.1 percent, beating estimates. Capital goods production expanded 5.8 percent during that period, while intermediate goods and nondurable consumer goods rose 3.7 percent and 1.4 percent, respectively.

Earlier this week the Federal Statistics Office said German industrial production increased 0.4 percent in February, beating estimates. On an annual basis, industrial production was up 4.8 percent. Industrial production in Greece rose at an annual rate of 1.7 percent in February, official data showed.

Investors will use Monday’s report to gauge ongoing developments in the currency bloc, which narrowly escaped a devastating 18-month recession in the second quarter of 2013. Since then, growth has been nascent. According to the International Monetary Fund, the Eurozone economy is expected to grow 1.2 percent this year and 1.5 percent in 2015. The Eurozone economy contracted 0.5 percent in 2013.

In its latest forecast the IMF warned Eurozone recovery was on a slippery slope and that “downside risks” still dominate. The Washington-based organization also warned the currency zone had a “relatively high risk” of deflation, which could impact the recovery efforts.

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