The International Monetary Fund has sounded the alarm on the health of the eurozone economy, warning there is now a four in 10 chance that the single-currency area will slide into its third recession since the financial crisis.
The IMF’s warning, in its twice-yearly World Economic Outlook, came as industrial output in Germany suffered its biggest monthly fall since 2009, raising fears the eurozone’s largest economy might itself be heading for a recession.
The sharp contraction in industrial output, which fell 4 per cent between August and July, followed a batch of poor industrial orders data this week. The sluggish figures show that Germany has begun to suffer from the weakening of demand for its exports, owing to geopolitical tensions and the slowdown in the rest of the eurozone.