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The euro area is probably already contracting, according to Goldman Sachs Group Inc.
The recession will last until the end of the year, economists led by Jari Stehn said, predicting a contraction of 0.1% in the third and 0.2% in the fourth quarter. Growth will return in 2023, they said.
The reasons for the downturn include disruptions in energy supplies from Russia, the end of the post-pandemic rebound in services, weaker global momentum and political turbulence in Italy that could delay the disbursement of European Union aid.
“Looking across countries, we have Germany and Italy in clear recession in the second half, while Spain and France continue to grow,” the economists said. “The risks to our forecast are skewed toward a sharper recession in the event of an even more severe disruption of gas flows, a renewed period of sovereign stress or a US recession.”
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