Several indicators were already leaning in this direction, such as the Purchasing Managers Survey Final Composite Index (PMI) of S&P Global for the eurozoneconsidered a good barometer of economic health in the region, was better than expected, registering a level of 47.3% in October, above the expected 47.1%, although it still remains below 50%. In particular, the impact of the region’s main economy is expected: “The German economy is on the way to recession, as can be deduced from the disastrous new orders,” he said. Thomas Gitzel, chief economist at VP Bank, in dialogue with Reuters.
The IMF He also anticipated that the region could face an imminent recession, not only because of the lower growth rate, but also because of the impact it will have on power supply interruption and the cost of living crisis given inflation of record levels that cross the countries of the region.
The Regional Economic Outlook report on Europefrom the International Monetary Fund (IMF), is released at a time when countries grapple with high inflation and a worsening energy crisis, which has depressed household purchasing power and raised business costs.
Although surveys indicate that price pressures have eased, they remain high, and the European Central Bank is under pressure while inflation is more than four times its 2% target, hitting a record 9.1% last month.
The ECB faces the prospect of raising interest rates aggressively just as the economy enters a recession and despite the fact that several directors of the entity had warned that the level of interest rates had already entered recessionary terrain.
The last data of inflation for the common area, it registered a new record in the 19 countries that make it up. Annual inflation hit 10.7% in October, the European Union’s statistical agency Eurostat said on Monday. It is an increase from 9.9% in September and the highest figure since eurozone statistics began to be compiled in 1997.
Source: Ambito
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