Despite the record rise in prices, eurozone growth accelerated with the revival of demand offsetting a stalled manufacturing sector. From the reading of the preliminary ‘flash’ data, the main SME S&P Global Composite index of the Eurozone rose in April to 55.8 from 54.9 in March, signaling the strongest rate of expansion since September. Although the growth trends of the sectors have indicated very different rates.
Data that, according to ING experts, send a ‘hawkish’ signal to the European Central Bank (ECB). “There were many reasons to expect a more significant weakening of SMEs in April – the economists point out -, including weak consumer confidence, high inflation, supply chain disruptions and tightening of financing conditions. they could have had a negative effect on production. But the SME indicates that the economy has shown that it is quite resilient to these factors. An increase mainly due to the reopening effects that the eurozone economy continues to benefit from. ”
“With the PMI signaling an economic recovery, the risks to the inflation outlook remaining on the upside, this is likely to be another argument to push the ECB to act faster than initially anticipated,” they say from ING who expect a first rate hike in the third quarter and another in the fourth. “We keep an eye on the growth scenario”, they warn again of ING.