Thursday, October 10, 2013

Europe’s Recovery (excerpt)

The OECD Leading Composite Index for Europe is confirming the region's recovery. It is up for the past 11 consecutive months to August’s 100.5, the highest reading since July 2011. Leading the way up have been some of the more distressed countries in the euro zone, particularly Spain. The UK is also looking very strong. Here is August’s ranking: Spain (102.0), Ireland (101.9), Greece (101.8), Portugal (101.4), UK (101.2), Italy (100.7), Europe (100.5), Germany (100.4), Belgium (100.2), Netherlands (100.0), and France (99.7).

Yet the IMF is expecting that the euro zone’s real GDP will grow by only 1.0% next year after falling 0.4% this year. The organization’s latest report challenges the notion that the region is out of the woods. It sees potential for a renewed financial crisis, and is critical of the slow pace of banking and economic reforms. Labor markets remain mostly uncompetitive in the peripheral countries. Bank credit continues to shrink.

Today's Morning Briefing: Growing Pains. (1) Back to (law) school. (2) Multiple unconstitutional options. (3) The IMF is globally gloomy. (4) OECD leading indicators are upbeat. (5) Europe has hit bottom. The question is, Will it recover? (6) German indicators are mixed. (7) Emerging markets face some challenges. (More for subscribers.)

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