The eurozone recovery is likely to remain uneven, Schroders’ Zangana says

Azad Zangana, Schroders European Economist, comments on Markit PMI’s signals of a return to growth in Europe.

This morning’s flash purchasing managers’ indices* signalled a return to growth for the eurozone economy. The early and incomplete print for the July output/business activity index jumped from 48.7 to 50.4 – above the neutral 50 mark.

The rise in the index was better than expected with the consensus at 49.1. Indeed, this is the first time the index has signalled positive growth since January 2012, as the eurozone entered recession.

The improvement in the PMIs suggest the eurozone economy should exit recession in the third quarter of this year. The recovery is likely to remain uneven, with most of the growth being generated in core Europe, while peripheral Europe languishes with austerity.

However, stronger growth in aggregate will help support the union, which continues to battle high and rising unemployment, and dangerously low inflation.

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