Euro zone sentiment plunges in March as Ukraine war scares consumers

FILE PHOTO: A shopper pays with a Euro bank note in a market in Nice
FILE PHOTO: A shopper pays with a euro bank note in a market in Nice, France, April 3, 2019. REUTERS/Eric Gaillard

March 30, 2022

BRUSSELS (Reuters) – Euro zone economic sentiment fell sharply in March, data showed on Wednesday, as Russia’s invasion of Ukraine sent consumer confidence plummeting and their inflation expectations to record highs.

The European Commission’s economic sentiment index for the 19 countries sharing the euro dropped to 108.5 in March from a downwardly revised 113.9 in February. Economists polled by Reuters had expected a decline to 109.0 points.

Consumer confidence was the hardest hit, plunging to -18.7 in March from -8.8 in February, while sentiment in industry fell to 10.4 from 14.1. Confidence in the retail sector also suffered, declining to 0.2 in March from 5.5 in February.

Only the services sector was more optimistic with the reading improving to 14.4 from 12.9, data showed.

Selling price expectations among manufacturers rose to a record high for the survey going back to 2000, of 58.1 in March from 49.8 in February. Consumer inflation expectations also rocketed to the highest ever value, reaching 59.8 points against 37.7 in February.

(Reporting by Jan Strupczewski; editing by Philip Blenkinsop)