Eurozone economy slumps sharply

The hard-hit industrial production sector was the reason for the decline in Eurozone economic growth in June. According to official data released, the Eurozone has entered a technical recession since the beginning of 2023.

Eurozone growth has slowed but inflation remains well above the European Central Bank's (ECB) target of 2%, putting pressure on the bank to continue raising interest rates despite the sluggish economy, AFP reported.

Eurozone economic growth slows in June 2023. Photo: Reuters

Data from the HCOB Flash Eurozone Purchasing Managers' Index (PMI) survey published by S&P Global fell from 52.8 in May 2023 to 50.3 in June 2023.

S&P Global said the figures showed renewed weakness in the Eurozone economy after a slight recovery in growth seen in the spring, and also recorded the first decline in new business orders since January 2023, leading to a slowdown in job growth and pessimism about future output.

France recorded the lowest economic growth in June 2023, with the sharpest decline in manufacturing and services since February 2021. Meanwhile, Germany's growth almost stalled, in stark contrast to the previous three-month period to May 2023.

June saw a further escalation of growth concerns, particularly the impact of higher interest rates and the risk of a domestic recession, S&P Global said.

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