A GLOBAL financial crash is on the cards again as economists warn that the Eurozone "is going into deep recession".

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Eurozone: Christine Lagarde outlines ECB plans for first rate hike

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World governments have faced successive crises which have put immense pressure on their economies, as inflation soars and the cost of living crisis threatens consumer spending. Whereas many – including the Eurozone and the UK – intervened to prevent a recession on a grand scale during the pandemic, this help is being withdrawn just as the effects of the invasion of Ukraine begin to be felt.

Now, analysts suggest that many key economic markers are returning to where they were during the 2008 financial crash.

Robin Brooks, chief economist for the Institute of International Finance and a former Goldman Sachs strategist, noted the Purchasing Managers’ Index (PMI) for two of Europe’s largest economies, Germany and Italy, is already beginning to show signs of recession.

The index – which shows market conditions as positively expanding or negatively contracting – has not dropped to its 2008 levels for either economy, but has slumped below 50 since the start of the year.

Anything above 50 on the scale from zero to a hundred represents an expansion in production, whereas anything below marks a contraction – suggesting both powerhouse economies are already contracting in terms of their manufacturing output.

READ MORE: Eurozone collapse! 'Biggest financial crisis in its history' warning

Eurozone ECB

ECB help is being withdrawn just as the effects of the invasion of Ukraine take hold (Image: Getty)

Robin Brooks

Brooks: 'German manufacturing lost access to cheap Russian energy and thus its competitive edge' (Image: Getty)

Germany industry

Much of Germany's economy remains heavy industry manufacturing which consumes a lot of gas (Image: Getty)

He added that the “Eurozone is going into [a] deep recession” and that it was a sign that the “global recession is coming”.

The leading economist noted that the Eurozone at large was facing a trade deficit “on a scale never seen before” as imports outstrip exports for the economic bloc.

After building up higher exports since the Eurozone crisis of 2011, since mid-2021 imports into the area have outstripped exports, with the chasm between the two growing in recent months.

By the EU’s own figures, the Eurozone had a €26.3billion (£22.2billion) trade deficit in May 2022, compared with a €12billion (£10.1billion) surplus in May 2021.

www.asiafinancial.com

Huawei Warns of Long Global Recession, Targets 'Survival'

Jim Pollard
3 - 4 minutes

August 23, 2022

To survive ”the crisis of the next three years,” Huawei’s strategy must shift from the pursuit of scale to a focus on profit and cash flow, said founder Ren Zhengfei in an email.


Huawei founder Ren Zhengfei attends a panel discussion at the group's head office in Shenzhen, June 17, 2019. Photo: Aly Song, Reuters.

China’s Huawei Technologies said its main target is survival as it warned that the world is entering a long recession that will leave its marginal businesses shuttered and everyone feeling ”the chill.”