Survey shows that economic activity in the Eurozone has significantly slowed down, and the risk of stagflation has increased.

People’s Finance and News, April 8—According to a survey released by S&P Global on the 7th, the euro area’s private-sector economic activity slowed significantly in March, driven by factors such as the Middle East conflict pushing up energy costs and disrupting supply chains. The data show that the euro area’s composite purchasing managers’ index (PMI) for March fell to a final value of 50.7 from 51.9 in February, the lowest level in nine months. By industry, the euro area’s services sector PMI for March fell to a final value of 50.2 from 51.9 in February, the lowest level in 10 months. Chris Williamson, chief business economist at S&P Global Market Intelligence, said the March PMI data indicate that the Middle East conflict has dealt a severe blow to the euro area economy. He said that, due to factors including surging energy prices, blocked supply chains, turmoil in financial markets, and another downturn in demand, the growth signs that had appeared at the beginning of this year in the euro area are no longer present, and rising prices have further fueled concerns about stagflation in the short term—or an even worse scenario. Williamson said that unless the Middle East conflict is resolved quickly, the euro area economy may face contraction risks in the second quarter of this year. Even if the conflict ends quickly, the destructive impact of the fighting on the energy market could last for several months. (Xinhua)