UK: As inflation continues to rise, Fitch Ratings predicted to Bloomberg on Thursday that Germany and Italy would enter recession by the end of the year.
James McCormack, head of sovereign and supernatural at Fitch, claims that "the recession itself is significant" despite the fact that it is not forecast to be "severe".
According to the most recent data from Germany's Federal Statistics Office, inflation in the country that has the largest economy in the European Union accelerated in February, rising 9.3% year-on-year and 1% month-on-month (Destatis). Despite government relief efforts, rising food and energy prices have severely damaged the country's economy.
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The German economy saw a 0.4% quarter-on-quarter decline in the last three months of 2022. The actual contraction was higher than the estimated 0.2% GDP decline.
Consumer prices in Italy, the third-largest economy in the European Union, rose 9.2% in February from the same month a year earlier, slowing from a 10% increase in January, according to preliminary data released on Thursday by the country's statistics agency. Was. ISTAT.
According to a report by Nomisma think tank, the country's purchasing power has more than halved in the last one year. One in seven Italians claimed that their income was insufficient to cover their expenses.
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A quarter of respondents claimed to have spent all their income on necessities, and 26% of households in Italy said they were worried about making it through the end of the month.
By the end of the year, the US could experience even a "modest" recession, McCormack warned Bloomberg, adding that "the UK is probably already there."
The economist also emphasized how difficult it is for governments around the world to address the cost crunch created by rising food and energy costs since the start of the conflict in Ukraine.
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There is currently little hope of a quick recovery, and rising costs have created instability across the global economy.