THE “Germany is on the verge of recession”, warned this Monday the IFO, main group of experts country and which periodically publishes a survey of entrepreneurs. This time, these businessmen “indicated that they foresee a significant deterioration in conditions in the coming months”, which predicts “awkward times” for the largest European economy
The activity of the industrial sector “declined sharply”, raising the levels of pessimism in that sector to the lowest levels that marked the beginning of the pandemic. In the service sector, “the business climate [também] significantly deteriorated.”
Germany is facing uncomfortable moments”, summarizes the group of experts.
Companies, according to the IFO, recognize that it is very difficult to predict the near future, which is in itself a factor that penalizes investment. “High energy prices and natural gas shortages are already taking a toll on the economy,” says IFO Chief Economist Klaus Wohlrabe.
Economic activity contracted in July, fueling fears of a recession in the eurozone
On Friday, flash data from Europe’s largest economies indicated activity in the eurozone contracted in July, the first time since the pandemic lockdowns. The scenario was outlined by the so-called Purchasing Managers’ Indexes (PMIs) released by S&P: the index not only came out worse than economists had forecast, but also fell below the 50-point threshold, signaling a contraction. in activity and fuels recession fears.
A recession is generally defined as two consecutive quarters of decline in economic output in a chain, that is, in the comparison between one quarter and the immediately preceding quarter.
Source: Observadora
