Economic growth slowed as winter approached, but at a slower pace than expected, El Pais reported. Eu and eurozone GDP grew by just 0.2 per cent in the third quarter, down from 0.7 per cent and 0.8 per cent in the previous quarter. In sharp contrast, inflation continues, hitting 10.7% in October in the euro zone, according to Eurostat data released on Monday. The peak has been broken again. Inflation has finally broken 10 and will continue to widen, there is no news yet that the ECB’s rate hike will curb prices, and economic activity is slowing.
Experts predict the recession could start in the final quarter of this year, with Christine Lagarde, president of the European Central Bank, saying last week: “It is likely that economic activity in the euro area slowed sharply in the third quarter of this year and we expect a further slowdown in the rest of this year and early next year.” Research services such as investment bank Goldman Sachs believe a recession is imminent and predict it will last until mid-2023.
Experts believe that while the labor market is working well for now, it could see some deterioration in the near future as the ECB steps up interest rate hikes further: “The labor market continued to work well in the third quarter, with the unemployment rate remaining at a record low of 6.6 percent in August. While short-term indicators point to continued job creation in the third quarter, economic weakness is likely to lead to some increase in unemployment going forward, “with unemployment in the euro area forecast to exceed 7% in 2023.