Eurozone inflation, Asian factory activity and other economics news to read

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Joe Myers, Writer, Forum Agenda

• This weekly round-up brings you the latest news from the world of economics and finance.
• Top economy stories: There is a mixed picture for factory activity in Asia; Eurozone inflation slows; US trade deficit widens.

1. Mixed picture for factory activity in Asia

Factory activity in several Asian economies weakened in March, but there were some brighter signs in China and South Korea, according to new surveys and data.

An official Purchase Managers’ Index survey released for China on 31 March revealed that factory activity expanded for the first time in six months, while separate data showed that South Korean exports rose 3.1% in March compared to the previous year.

However, manufacturing activity was weak across most of Asia, including South Korea, where weak domestic demand offset overseas sales, as well as in Japan, Malaysia and Viet Nam.

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2. Eurozone inflation falls

Inflation in the Eurozone fell in March, news that could prompt the European Central Bank to start lowering interest rates, according to Reuters.

Despite expectations it would remain steady from February to March, consumer price growth dropped to 2.4% last month, compared to 2.6% in February.

Underlying inflation fell from 3.1% to 2.9%, beating Eurostat expectations of 3.0%. Services inflation has remained steady at 4.0% for several months, suggesting that quick wage growth is keeping prices in the sector under pressure.

While inflation in the eurozone has been declining steadily for more than a year, it has fallen at a faster rate than many expected since last autumn.

Eurozone inflation has fallen. Image: Eurostat

3. News in brief: Stories on the economy from around the world

New orders for US-manufactured goods increased more than expected in February, rising 1.4% after falling 3.8% in January.

It comes as US prices moderated in February, among a rise in consumer spending and a slowdown in the cost of services outside of housing and energy.

China’s new home prices rose at the fastest rate in two and a half years in March, increasing by 0.27% on the previous month, according to a private survey.

UK shop prices grew at the slowest pace in over two years in March, according to the British Retail Consortium. Shop price inflation dropped from 2.5% in February to 1.3%.

Japan’s economic output recovered to full capacity in the final quarter of last year. The output gap stood at 0.02%, the first positive reading in 15 quarters.

Turkey’s consumer inflation rose to 68.5% in March, making it the fifth straight month of increases, Bloomberg reports.

Industrial orders rose in Germany in February, but by less than expected – 0.2% rather than the 0.8% a Reuters poll of analysts had predicted.

Annual inflation in the Philippines rose 3.7% in March from a year earlier, with the component for rice rising at its fastest pace in 15 years.

The US trade deficit widened in February, despite exports increasing to record highs. This rise was offset by a surge in imports.

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