European economic activity fell again in September amid growing expectations that eurozone countries will face a recession, according to a poll yesterday.
“The economic slowdown in the eurozone worsened in September, with business activity contracting for the third consecutive month,” said Standard & Poor’s Global Flash of eurozone purchasing managers.
Although modest, the rate of decline has accelerated to the worst pace since 2013, excluding pandemic blockades.
The purchasing managers’ index fell from 48.9 in August to 48.2 in September, knowing that, according to “French”, it represents below the economic contraction threshold of 50.
“Stagnation in the eurozone is present as companies report deteriorating trading conditions and increasing price pressures associated with higher energy costs,” said Chris Williamson, chief business economist at Standard & Poor’s Global Market Intelligence.
He added: “Germany is facing the most difficult circumstances, with the economy deteriorating at a pace that we have not seen, except for the pandemic period, since the global financial crisis.”
Skyrocketing energy prices and a sharp rise in the cost of living have weakened demand and reduced manufacturing output. Inflation in the eurozone rose to 9.1% in August, the highest level ever, while analysts predict that the rate will reach double digits by the end of the general year.
The European Central Bank raised interest rates by a record 75 basis points this month and has pledged to do everything it can to limit the rise in consumer prices.
“Indicators point to a contraction of the eurozone economy of 0.1% in the third quarter of 2022 and a sharp decline in the fourth quarter,” Williamson said, noting that “the challenge faced by policymakers in curbing inflation by avoiding a sharp decline in the economy is therefore becoming increasingly difficult “.
In addition, a European Central Bank official said yesterday that the bank will move forward with rising borrowing costs, despite the risks of a recession in Europe.
“In the coming weeks, we will definitely raise interest rates,” Martins Kazaks, a member of the bank’s board of governors, told Latvian TV yesterday.
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