Euro Zone Edges Closer to Recession on Slowing Business Activity

The eurozone’s purchasing managers’ index (PMI) has fallen to a three-year low in October, at 46.5, marking a clear slowdown. Economists had predicted a slight improvement to 47.4. This data suggests the eurozone may face a mild recession in the second half of 2023, with two consecutive quarters of negative growth. The main factors contributing to this downturn include a rate-hiking campaign by the European Central Bank, a slowing global economy, and rising energy prices due to the Middle East conflict. The economic situation in the eurozone is further complicated by tightening credit standards and rising borrowing costs.