The Strategist

Bloomberg: Risk of recession in Eurozone grows to its highest since November 2020

08/18/2022 - 14:14

According to the experts surveyed by Bloomberg, the likelihood that the eurozone economy will experience a recession has increased from 45% to 60%. This level is the peak since November 2020.
Germany's economy is forecasted to enter a period of stagnation as soon as this quarter, making it the country that would suffer the most. The survey expects that in 2022, inflation in the euro zone will be roughly 8% on average. This is around four times more than the European Central Bank's forecast.

Experts anticipate 4% inflation in 2023, and 2% inflation by 2024. According to Bloomberg, an increase in living expenses and "energy concerns from Russia" are harming businesses and individuals in the region.

A severe drought that caused the water levels in Europe's rivers to decrease over the summer has made the issue worse.

The Business Activity Index (PMI) for the Eurozone dropped to 49.9 by July (a reading below 50 denotes a drop in business activity0.

The GDP of countries in the Eurozone climbed by 0.7% in the second quarter, according to the results. At the same time, regional inflation picked up speed to 8.9% on an annual basis.