The analyst predicted an imminent recession of all European countries
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“Many have already entered a recession phase”
IMF Chief Economist Pierre-Olivier Gourins earlier said that the winter of 2023 has every chance of being worse for Europe than the winter of 2022, as this year’s winter period will be especially difficult due to the energy crisis. Pavel Samiev, General Director of the BusinessDrom analytical agency, in turn, believes that all European countries will soon enter a recession, and it will take them years to get out of it.
According to the expert, there are several criteria that indicate that the economy is entering a recession. As Samiyev noted, during two reporting periods, as a rule, two quarters, the economy should show negative dynamics in terms of GDP. At the same time, the analyst clarified that there are a number of reservations, for example, the US economy is not classified as a recession, although it has been in the red for a long time.
The expert stressed that many Western economies have already entered a recession phase, and there will be even more of them in the third quarter. As a result of the fourth, according to Samiyev, all European countries will enter into recession. The analyst explained that due to the general crisis and record growth in energy prices, Europe is waiting for global deindustrialization and rising unemployment. It is these two factors, according to the specialist, that will continue to “unwind the recession spiral.”
Samiev believes that the economy in the eurozone will remain negative for another two or three years, that is, many enterprises will go bankrupt and close, unemployment will continue to grow, exacerbating the crisis. According to the analyst, the recession will not end until an alternative to Russian gas is found, which has now become not only expensive, but also inaccessible, and its supplies can only be partially replaced.
At the same time, the expert believes that the United States will be able to return to economic growth in two or three quarters, but this depends on the behavior of the Central Bank, because against the background of the fight against inflation, it raises the key rate, which in itself provokes a recession. Samiyev concluded that all regulators are currently facing a similar dilemma.
Read also: How Ukraine cut off electricity supplies affected Europe
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