Brussels: The eurozone appears to be on the brink of a recession, as indicated by a survey released on Thursday, which highlighted escalating inflation and a slowdown in economic growth heading into the third quarter of the year. Business activity across the euro area has been in decline, while a cost-of-living crisis continues to impact households, forcing people to reduce spending. Rising gas prices have severely affected manufacturers, and consumer cutbacks have also weakened the service sector, contributing to an economic downturn.
The Reuters survey has already suggested a 60% chance of a recession in the eurozone. Inflation is believed to have more than quadrupled in August, prompting the European Central Bank to raise interest rates again, amidst concerns of a significant rise in prices across Europe.
The S&P Global’s Flash Composite Purchasing Managers’ Index (PMI), which measures overall economic strength, fell to 46.9 in August. Chris Williamson, Chief Business Economist at S&P Global, stated that the eurozone is now moving towards an economic recession. After initially showing signs of recovery following the COVID-19 crisis, the eurozone’s economic momentum has gradually slowed, now edging closer to a recession.
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