(MENAFN– ecpulse) Euro area manufacturing and services eased expansion in June amid concerns of low inflation and geopolitical tensions in Ukraine.
PMI composite of manufacturing and services came in at 52.8 in June from 53.5 in May, compared to median forecasts of 53.4.
The manufacturing sector growth slowed to 51.9 from 52.2, while the services gauge recorded 52.8 from a prior of 53.2.
In Germany, the manufacturing sector widened expansion to 52.4 this month from 52.3 but the services showed a retreat from 56.0 to 54.8.
The French PMI manufacturing slipped to 47.8 in June from 49.6 and services measure fell to 48.2 from 49.1.
The ECB has referred in more than occasion the economy will recover in a gradual manner, but the recent fall in prices have raised concerns about recovery path.
CPI for the year ended May plunged to 0.5 percent from 0.7 percent in April, taking further steps from the ECB’s inflation target of close to 2 percent.
Accordingly, the ECB decided this month to introduce new measures to stave off the low inflation and bolster banks’ lending.
The measures include “further reductions in the key ECB interest rates, targeted longer-term refinancing operations, preparatory work related to outright purchases of asset-backed securities and a prolongation of fixed rate, full allotment tender procedures, ECB bulletin for June said.
“The Governing Council decided to suspend the weekly fine-tuning operation sterilizing the liquidity injected under the Securities Markets Programme,” the bulletin added.
The usage of large-scale asset purchases, known as quantitative easing, is on the table, but the focus meanwhile is on the recent stimulus announced on June 5, ECB President Mario Draghi told Dutch newspaper De Telegraaf in an interview published on Saturday.
"Interest rates will turn as soon as there is clear growth, so more than 2 percent, but from today`s perspective that will hardly be before 2016," ECB Governing Council member Ewald Nowotny said.
As of 08:05 GMT, the euro traded around 1.3589 against the U.S. dollar after hitting a high of 1.3612.
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