(MENAFN– ecpulse) European manufacturing and services winded expansion in January, giving a sign of hope the euro area would continue its gradual recovery.
A composite of manufacturing and services showed further expansion in January as the PMI gauge soared to 53.2 from 52.1 in December, compared with median forecast of a rise to 52.5.
PMI manufacturing recorded 53.9 from 52.7 in December and the services sector rose to 51.9 from 51.0.
In Germany, the manufacturing sector widened growth in January to 56.3 versus 54.35, while the services gauge inched up to 53.6 from 53.5.
ECB President Mario Draghi has echoed that the 18-nation region would continue a gradual recovery this year.
ECB policymaker Ewald Nowotny said the bank could revise up its growth forecast for the euro area in March after raising it slightly in December to 1.1 percent expansion.
"We do see encouraging signals and the first signs of an economic recovery in the euro area, but it is still weak and uneven," Draghi cautioned on Wednesday.
“The risk of setbacks is large. I would be very careful not to give an overly optimistic outlook," he added.
By the same token, IMF chief economist Olivier Blanchard has warned “the lower the inflation rate, and … the larger the deflation rate, the more dangerous it is for the euro recovery.”
The euro area is still facing some challenges to lurch toward recovery, most notably the high unemployment and some risks of deflation.
A report release today showed that Spain’s jobless rate climbed to 26.03 percent in the fourth quarter from 25.98 percent in the previous three months.
CPI inflation retreated to 0.8 percent in December from 0.9 percent in November, where the ECB mentioned the euro area economy may experience a prolonged period of low inflation.
As of 09:08, the euro traded around 1.3626 versus the U.S. dollar after setting a high of 1.3640.
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