The strength of private enterprises exceeds expectations! Eurozone PMI struggled to expand in May

The Zhitong Finance App learned that the Eurozone private sector grew slightly in May, and its ability to withstand the uncertainty caused by America's erratic trade policy exceeded initial estimates. According to Wednesday's data, the final Eurozone composite PMI fell to 50.2 from 50.4 in April, but it was still slightly above the 50 boom-bust line. The initial value of the index was 49.5.

Eurozone private sector grew slightly in May

Hamburg Commerzbank economist Cyrus Della Rubia said that the slowdown in growth was due to a slight decline in service activity, while manufacturing output maintained the same moderate growth as last month.

In a statement, he said, “We believe that further ECB interest rate cuts and fiscal stimulus (Germany in particular) will be enough to offset the negative effects of rising tariffs and heightened uncertainty and help the economy develop in the second half of the year. ”

The International Monetary Fund and other institutions predict that the Eurozone economic growth rate will not exceed 1% in 2025 — this performance has prompted the ECB to continue to cut interest rates. The market generally expects the bank to cut interest rates for the eighth time in this round this Thursday, lowering deposit interest rates to 2%.

As US President Trump's criticism of free trade brings huge uncertainty, EU policymakers will simultaneously present alternative economic scenarios in their quarterly forecasts. Currently, most EU exports to the US face 10% tariffs, but Trump threatened to raise the tax rate to 50% in July. The EU is trying to find a more favorable solution through negotiations.

Meanwhile, inflation is falling. Tuesday's data showed that consumer prices rose 1.9% in May, and price pressure on the much-publicized service sector eased significantly.

PMI data attracted market attention because it was released early and is good at revealing economic trends and inflection points. As an indicator of the breadth rather than depth of changes in output, it is sometimes difficult for business surveys to directly correspond to quarterly GDP data.