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Germany leads as Europe slides towards recession amid supply shortages

Purchasing managers' indexes due Tuesday will likely show private-sector output shrinking for a second month, adding to signs that a recession in the 19-nation euro zone is now more likely than not

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Illustration: Ajay Mohanty

Bloomberg
Europeans returning from their summer breaks will find a more fragile economy that risks buckling under the threats of energy rationing, record inflation and tighter monetary policy.

Purchasing managers’ indexes due Tuesday will likely show private-sector output shrinking for a second month, adding to signs that a recession in the 19-nation euro zone is now more likely than not. Business confidence gauges from Germany, France and Italy will probably confirm that direction.

Germany, Europe’s largest economy, has emerged as the region’s weak spot, with its outsized industrial base suffering disproportionately from surging energy costs and a persistent shortage of supplies. Meanwhile, services

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First Published: Aug 21 2022 | 10:29 PM IST

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