Eurozone businesses became more downbeat about their prospects in February as financial markets world-wide tumbled in response to concerns about weaker growth prospects for the global economy. The second consecutive month of declining confidence suggests the turmoil in financial markets may take a toll on economic growth in the currency area. With consumer confidence also in decline, domestic demand within the eurozone appears set to weaken just as the appetite for its exports falls in large developing economies such as China. A pickup in sentiment helped drive the eurozone's recovery in 2015, although economic growth weakened in the second half of the year. Signs that may prove less of a support in 2016 increase the likelihood that the European Central Bank will announce further stimulus measures when policy makers next meet on March 10. The European Commission Friday said its Economic Sentiment Indicator--which aggregates measures of consumer and business confidence-fell to 103.8 in February from 105.1 in January. That was the lowest reading since June 2015, and marked a larger fall than the decline to 104.4 forecast by economists who were surveyed by The Wall Street Journal last week. However, the measure remained above its average of 100.00 going back to 1990, an indication that eurozone business and consumers remain relatively optimistic. The decline in sentiment follows other signs the eurozone economy is set to slow, with surveys of purchasing managers released Monday indicating growth in February was its weakest since the start of 2015. Confidence among manufacturers fell sharply as businesses reported export orders have weakened. But services providers, whose sales are more concentrated within the eurozone, also became gloomier, as did retailers. Sentiment weakened in each of the eurozone's five largest economies, but most sharply in the Netherlands and Italy. Without a weakening of growth, ECB policy makers already face an uphill struggle to raise the annual rate of inflation to their target of just under 2% from 0.3% in January. Economists estimate that the inflation rate fell in February, and may even show that consumer prices were lower than a year earlier. Spain's statistics agency Friday said its measure for the month fell to minus 0.8% from minus 0.3% in January, while France's statistics agency said its measure dropped to minus 0.1% from 0.3%. However, the Commission's survey provided some comfort for the ECB, since it found that consumers expect prices to rise at a faster pace over the coming 12 months than they did in January, while retailers also expect the prices they charge to increase more rapidly. Finance officials from the Group of 20 largest economies meet in Shanghai Friday and Saturday to discuss new ways to reinvigorate growth, with the U.S. government, the International Monetary Fund, the Organization for Economic Cooperation and Development and some central bankers pressing for more action by governments and less reliance on central-bank stimulus, including increased investment spending. Within the eurozone, Germany is widely see as the economy with the greatest capacity to answer those calls, since t he government is running a small budget surplus and can borrow at very low interest rates for a long period of time. But on the sidelines of the G-20 gathering, German Finance Minister Wolfgang Schäuble Friday rebuffed calls to ramp up spending, saying instead that governments should focus on what are known as "structural reforms," or politically difficult measures that raise long-term potential by increasing competition, spreading innovations and boosting productivity. "Fiscal as well as monetary policies have reached their limits," Mr. Schäuble told a gathering of bankers and officials hosted by the Washington, D.C.-based Institute of International Finance. "If you want the real economy to grow, there are no shortcuts which avoid reforms."

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