Even though the economic growth rate has slowed down, there has been a big relief on the inflation front. According to Eurostat data, retail inflation in the Eurozone stood at 2.9 percent in October. This is the lowest level of inflation in two years. In fact, to reduce inflation, the European Central Bank has aggressively increased interest rates. This has controlled inflation, but the economic growth rate has been ruined.
Economy of Eurozone
Eurozone is a group of 20 countries in Europe that use a common currency, the Euro. According to the data, the economy of the Eurozone declined by 0.1 percent during the months of July to September. In the previous quarter i.e. in the three months from April to June 2023, the economic growth rate of the Eurozone was only 0.20 percent.
Retail inflation has reduced so much
The whole world is struggling with economic challenges for the last two-three years. First the Corona pandemic and later the increased geopolitical tensions due to wars disrupted the supply chain. Due to the above reasons, inflation reached record high levels across the world. The Eurozone, one of the most prominent economic regions, was most affected by these disruptions and is now facing a dire threat of economic recession.
If this happens there will be a recession
The Eurozone has reached the threshold of economic recession. According to the report, during the third quarter of this year i.e. during the three months from July to September, the size of the Eurozone economy decreased slightly. In other words, the economic growth rate of the Eurozone during the period under review remained less than zero.
What do official figures say?
Germany, Europe’s largest economy, has already fallen into recession. Now there is news of recession in Eurozone. If the economic growth rate is less than zero during the current quarter i.e. October to December, then the Eurozone will also go into recession.
Germany has fallen into recession
According to the accepted definition of economics, if an economy contracts for two consecutive quarters, i.e. its size declines, then it is considered that the particular economy is in the grip of recession. It can also be said that economic growth rate being negative or less than zero for two consecutive quarters is an economic recession.