Faith in euro zone economy hits two-year high in September

Fri Sep 27, 2013 3:11pm EDT
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By Martin Santa

BRUSSELS (Reuters) - Optimism about the euro zone's economy brightened for the fifth month running and hit a 2-year high in September, adding to evidence that a recovery is underway.

The European Commission said on Friday the 17-nation bloc's morale rose faster than expected to 96.9 from 95.3 in August, the best reading since August 2011.

The 9.5-trillion euro economy returned to a modest growth in second quarter of this year with a 0.3 percent rise, driven by a stronger-than-expected expansion in Germany and France.

Euro zone leaders, struggling to bring down record unemployment, are looking for growth to continue into 2014.

"It's the first time in quite a while that we have seen such a broad improvement," said Frederik Ducrozet, a senior euro zone economist at Credit Agricole. "There is a rebalancing in the sources of growth, which in the initial phase was driven by manufacturing," he added.

In a promising sign, confidence was also up in the wider European Union, rising by 2.4 points to 100.6 points and taking the Commission's measure of morale above its long-term average for the first time since July 2011.

For the euro zone, the positive trend was particularly clear in three out of the bloc's five largest economies, with Spain and Italy rising by 2.5 points and France up by 1.6 points.

The European Central Bank said earlier this month that recent confidence indicators confirmed expectations of gradual improvement in the economy, which is expected to gain a more solid footing next year.   Continued...

A picture illustration taken with the multiple exposure function of the camera shows a one Euro coin and a map of Europe, January 9, 2013. REUTERS/Kai Pfaffenbach