Pmi Reading Shows Recession In Eurozone

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Pmi Reading Shows Recession In Eurozone

December's PMI Reading Shows Recession In Eurozone

The PMI reading for December shows that the already depressed business activity in the EU has turned even worse. That's why many experts are now confident that the Eurozone is now most definitely facing a recession.

The decline in business activity was not limited to a specific sector. In fact, the decline was broad, which suggests that business activity has gone on across most of the sectors. Especially the economic activity in France & Germany has taken a hit, which is now spreading to other parts of the EU.

PMI Reached 47.0 In December

In the last quarter, a -0.1% contraction was recorded in the Eurozone, and now we have the PMI index, which shows that business activity remained negative in all months.

Overall, that's the 2nd quarter in a row that the Eurozone has faced economic contraction rather than growth. In short, all the telltale signs of recession can be seen in the Eurozone economy.

Against this backdrop, the central bank of Europe went ahead and lowered the growth forecasts for this year and the next one.

The PMI reading shows that the index has moved from 47.6 in November to 47.0 in December, a change of -0.6%. This also shows that the business activity continues to plunge deeper into contraction rather than any meaningful recovery.

According to an expert from Capital Economics, the recent PMI reading from the Eurozone provides enough evidence to say that the EU is facing a recession.

If we look at Germany, one of the leading EU economies, the downturn has intensified even further. France is also facing a similar issue as the demand for its goods/services has declined significantly.

That's why it is safe to say that the German economy will likely contract in 2023. As for the next year, the growth will likely remain very weak, which means no major changes are expected.

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