Economic activity in the eurozone has slowed considerably in June, partly due to high inflation and supply chain disruptions. This is evident from new figures from market researcher S&P Global.
Companies are struggling with high purchasing costs, but also with staff shortages. Furthermore, high inflation undermines the purchasing power of households, delaying major purchases.
“Eurozone economic growth is showing signs of slowing down as the tailwind from the coronavirus recovery eases and households face high costs and business and consumer confidence declines,” S&P Global chief economist Chris Williamson said in a statement.
To deal with high inflation, central banks are raising interest rates and there are fears that those higher interest rates will lead to an economic recession. The European Central Bank (ECB) is likely to raise interest rates for the first time in more than a decade in July.