WORLD
Economic mood in euro zone sours again in April
Baku, April 30 (AZERTAC). Confidence in the euro zone's economy fell further in April, data showed, strengthening the case for a cut in interest rates this week by the European Central Bank.
The euro zone is facing a difficult road out of recession and has seen a souring of the mood among companies and consumers since March, after an optimistic start to the year was disrupted by turmoil in Cyprus and Italy.
Pessimism set in even in Germany, which has performed better than most during the crisis, with economic sentiment there worsening by 2.3 points. Morale also fell in France and Italy, meaning the euro zone's three largest economies are all witnessing a marked decline in the confidence that is crucial in getting the output in the euro zone growing again.
Many expect the ECB to cut interest rates to lower the cost of borrowing and help improve morale.
Germany's economic resilience and reforms in southern Europe sowed hope early this year that the bloc could pull out of recession before the end of 2013, but a messy bailout in Cyprus and Italy's inconclusive February election, which failed to yield a government until late April, have weighed on confidence.
France's weak economy and public accounts are also a concern.
Meanwhile, budget cuts have been at the centre of the euro zone's strategy to overcome a three-year public debt crisis but they are also blamed for a damaging cycle where governments cut back, companies lay off staff, Europeans buy less and young people have little hope of finding a job.
Spain, the euro zone's fourth largest economy, said last week its economy would shrink more than initially expected this year and its budget deficit would be higher than promised.
Growth should return next year, and economic sentiment improved by almost 1 point, the Commission said, in a sign that despite record unemployment, reforms may be helping business.