According to the results of a survey by S&P Global released on January 24, the euro area’s economy returned to growth for the first time in six months in January, sparking a surge hopes that the European economy will avoid a recession this winter.
Specifically, the Flash PMI (predicting index before the PMI – purchasing managers’ index) of the Eurozone in January rose to 50.2 points from 49.3 points in December 2022. PMI readings above 50 indicate growth.
The European economy has benefited from lower inflation, improved supply chains and the recent reopening of China’s economy, sparking optimism for 2023.
S&P chief economist Chris Williamson said: “The survey certainly brings good news that any recession is likely to be much less severe than previously feared and that a recession completely avoidable.” However, he cautioned that the region is not yet out of danger as demand continues to fall, albeit at a slower rate than before.
[Niềm tin người tiêu dùng Đức được cải thiện khi giá năng lượng giảm]
According to the survey results, Germany – the largest economy in the Eurozone – also benefited from the strength of the loosened supply chain, helping the country’s manufacturing industry.
General PMI in Germany increased from 49 points in December 2022 to 49.7 points in January. However, output in France in January fell for the third consecutive month due to a sharp drop in service activity.
According to S&P, the output of the remaining members of the Eurozone (including 20 countries following Croatia joined in January) also increased once more. Inflation rate in this region remained high at 9.2%, but has decreased for two consecutive months thanks to the slowing rate of energy price increase.
Last week, European Central Bank (ECB) Governor Christine Lagarde said she expects the eurozone economy to develop “much better” than initially feared, with a forecast of a “slight slowdown”. instead of recession.
Minh Chau (VNA/Vietnam+)
