The severe impact on the industrial manufacturing sector is the reason for the decline in Eurozone economic growth in June. According to officially released data, the Eurozone entered a technical recession at the beginning of 2023.
According to AFP, Eurozone growth has slowed, but inflation remains well above the European Central Bank's (ECB) 2% target. This will put pressure on the bank to continue raising interest rates despite the sluggish economy.
Data from the HCOB Flash Eurozone Purchasing Managers' Index (PMI) survey published by S&P Global showed a decline from 52.8 in May 2023 to 50.3 points in June 2023.
S&P Global said these indicators reflect renewed weakness in the Eurozone economy after a slight recovery in growth recorded in the spring, and also mark 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, a complete reversal from the three months leading up to May 2023.
S&P Global said June saw a further escalation of growth concerns, particularly the impact of higher interest rates and the risk of a recession in the domestic market.
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