Economic Sentiment In Non Euro Countries Exceeds That Of Euro Area Countries

The Economic Sentiment Indicator (ESI) of the European Commission for the 16 countries in the Euro Area rose to 97.9 in March from 95.9 in February. The ESI for the 27 countries in the European Union rose to 99.6 from 97.6. Both indicators have risen substantially from their low points reached in February and March of this year and are close to their long term average of 100, but are well below their pre crisis peak. The first chart shows the history of the two indicators.

The higher level of sentiment in the EU than in the EA suggests that sentiment is somewhat higher in the non Euro Area countries than in the Euro Area Countries. Arithmetically, the low level of sentiment in Greece has reduced the level of average sentiment in the Euro Area, but more important, Greece's problems have no doubt dampened sentiment in the rest of the Euro Area. There were only 3 countries in the Euro Area in March that were at or above 100--Belgium at 103.2, Finland at 102.2 and Germany at 100.4. These countries together with Greece are shown in the second chart.

In the non Euro Area there were four countries where sentiment was at or above 100--the United Kingdom at 100.9, Poland at 101.5, Denmark at 110.0, and Sweden at 111.5. These are shown in the third chart