Germany39;s stuck in a crisis Ifo
Climate in French services worst since 2021

FRANKFURTBERLIN, July 25 Reuters Companies in the euro zone39;s two largest economies are growing more pessimistic, surveys showed on Thursday, raising concerns over the bloc39;s already sluggish recovery.

The euro zone has struggled to hold on to a postpandemic economic rebound led by the United States due to issues such as a less generous government investment, a technological deficit and reliance on raw materials from abroad.

The business climate in France and Germany unexpectedly worsened in July and entrepreneurs took a dimmer view of the coming months, the national polls showed, a day after a separate survey pointed to stalling growth in the euro area.

The readings will likely add to doubt over a modest rebound expected in the euro area, which is predicated upon a recovery in real income and stronger exports, and may strengthen a call for further rate cuts by the European Central Bank.

Are exports picking up? That39;s definitely not what these surveys are telling us, Dirk Schumacher, an economist at Natixis, said.

Aside from the cyclical problems there is the lingering question of whether Europe is still making the right products to benefit from global growth.

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