Recession in Europe is almost inevitable

The European market will contract in two fiscal quarters in a row over the next 12 months. This opinion is shared by economists polled by Bloomberg. According to a survey of the publication, a recession is 80% likely. A third higher than according to the previous similar survey (60%).

In tandem the energy crisis and the approaching winter will provide a drawdown in economic activity. Households and businesses in many countries in the region fear that energy rationing will be introduced. The economies most dependent on gas supplies, such as Germany, will begin to contract as early as this quarter.

The economy is already under pressure from bottlenecks in the supply chains, as well as rising inflation. It will most likely reach 9.6% this year. This is five times more than the figure planned by the European Central Bank. It will return to the target of 2% no earlier than 2024.

Experts believe that in this regard, by February next year, the ECB will raise its key rates by 2%. The second increase by 75 percentage points in a short time is expected in October.