By Agence France-Presse
BRUSSELS: Economic growth in the eurozone plummeted in June, a key survey showed on Thursday, as high prices took the wind out the strong recovery from the deep lows of the coronavirus pandemic.
The closely watched monthly purchasing managers' index by S&P Global fell from 54.8 in May to 51.9 this month. A figure above 50 indicates growth; below that, a contraction.
The slowdown, caused by a "cost-of-living shock," is "the most abrupt recorded by the survey since the height of the global financial crisis in November 2008," excluding the pandemic-caused lockdown, said Chris Williamson, chief business economist at S&P Global.
Since the beginning of the year, the European economy has recovered strongly from the lifting of restrictions linked to the Covid-19 crisis. The move revived tourism in countries like Spain and Greece, as well as transport.
It also benefited from household spending, as consumers burned through savings accumulated during many months of confinement, offsetting the negative impact of Russia's invasion of Ukraine.
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But in June, the "tailwind" of this pent-up demand "is already fading," Williamson warned.
The latest data "is now consistent with gross domestic product (GDP) growth of just 0.2 percent for the second quarter, compared to quarterly growth of 0.6 percent at the start of the year," he said.
