Skyrocketing energy prices in Europe mixed with a marked downturn in consumer spending and business activity across countries in Europe that have adopted the Euro as their primary currency have economists saying the dreaded word: Recession.
The economic downturn deepened even more in September, as Reuters reported, citing a survey that revealed details showing the economy in those collective countries has likely been entering a recession.
Consumers have been halting many types of discretionary spending as living costs in all areas rise.
According to RTE, manufacturing was hit particularly hard by the skyrocketing energy prices connected to Russia’s invasion of Ukraine.
Chris Williamson, a chief business economist at S&P Global, said, “A eurozone recession is on the cards as companies report worsening business conditions and intensifying price pressures linked to soaring energy costs.”
As Fast Company pointed out, while a U.S. economic recession hasn’t been officially confirmed by economists, investors on Wall Street and U.S. CEOs have been making moves in preparation for one after dismal forecasts.
While Europe is “struggling mightily,” as economist Aleksandar “Sasha” Tomic put it, it is important that the U.S. economy might face some of the same issues, but not all that the eurozone is facing.
Europe is dealing with inflation rates that are worse than that of the U.S. economy. Also, the effects of Russia’s invasion of Ukraine are being felt to a lesser degree in the U.S. compared to Europe.
Also, European economies are smaller than other trading partners like China, Canada, and Mexico.
Economists note, though, that whether European countries go through a recession or not, indications point to a very likely economic recession in the United States.