Christoph Weil, Senior Economist at a German commercial bank, stated in a report that the current Eurozone PMI index is at levels seen during past economic contractions, undermining the European Central Bank‘s (ECB) hopes for second-quarter economic recovery.
Unlike during the winter, where economic weakness was concentrated in Germany, the current economic slowdown is affecting all Eurozone countries due to the ECB’s rate hike actions slowing down economic growth across the region.
Exports are also unlikely to provide significant stimulus as global central banks have raised rates, leading to weakened demand.
He added that the PMI data is unfavorable for the ECB’s potential further rate hike, as the ECB’s projections are based on the assumption of continued growth in the Eurozone for the remaining time in 2023.
