According to a recent survey, European economies are facing a substantial risk of recession due to geopolitical conflicts and increased energy costs. The survey, conducted by the ifo Institute and the Swiss Economic Policy Institute, revealed that the chances of two consecutive quarters of declining output in the euro zone are highest in Germany and the Netherlands, standing at 38%. This percentage is notably higher than the 26% in the US.

The 20-nation bloc narrowly avoided a recession at the end of 2023, with Italy and Spain’s growth offsetting a downturn in Germany. However, the outlook for a quick recovery remains bleak, as the European Central Bank anticipates continued near-term weakness.

The ongoing war in Ukraine and tensions in the Middle East pose threats to supply chains and energy deliveries, which could undermine spending and investment. Additionally, there is a risk of increased price pressures in response to the prevailing uncertainty.

The survey, conducted from Dec. 7 to Dec. 21, 2023, involved 1,431 economic experts from 124 countries. The findings underscore the significant challenges facing European economies in the current global landscape.

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