The private sector in the 17 countries that share the euro posted the slowest rate of growth in five months, easing pressure on the region’s central bank to tighten fiscal policy, according to The Wall Street Journal. On Friday, Markit reported that the composite output index for the eurozone dropped to 55.8 in May from 57.8 the previous month, although that was better than the flash estimate of 55.4 published previously. The data showed that manufacturing expanded at the slowest rate since October while the services sector posted the least growth since January.
The chief economist of Markit, Chris Williamson said that the data suggest that the eurozone economy is likely to expand at a slower rate in the second quarter of the year than the 0.8% growth posted in the three months through March. Williamson added that “a 0.7% expansion could still be possible providing the survey data do not fall further in June.” The surveys also showed a significant diversion between eurozone leaders France and Germany and countries on the periphery, struggling with sovereign debts.