Bloomberg issues an EU recession alert.

According to an economist study, a downturn is probably coming next year.



According to economists cited by Bloomberg, the likelihood of a Eurozone recession has risen to its highest level since November 2020 due to energy shortages that pose a threat to raising already record inflation levels.


According to the assessment released on Monday, the likelihood of output contraction for two consecutive quarters has increased from 20% before the commencement of the conflict in Ukraine and the imposition of Western sanctions on Russia to 60%, up from 45% in the previous survey. According to the analysts surveyed by the outlet, Germany's economy, which is the largest in the union and one of the EU countries most vulnerable to reductions in the supply of Russian gas, is likely to stagnate as early as this quarter.


According to Bloomberg, "the rising cost of living is harming euro-area companies and individuals, with Russia's energy threats aggravating that situation moving into the final months of 2022." The publication also mentioned supply constraints made worse by severe droughts.


According to the analysts surveyed, inflation in the union would likely average close to 8% this year, exceeding the European Central Bank's target by about four times (ECB). It predicts inflation will reach 4% in 2023 before dropping to the desired 2% level in 2024.


Additionally, according to the respondents, the ECB will increase interest rates by half a percent in September.


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