Germany's Economy Faces Steepest Decline in Business Activity Since Start of Pandemic

Germany's economy is showing signs of weakness, with the steepest decline in business activity in over three years, raising concerns of a potential recession. The country's Purchasing Managers' Index (PMI) fell to its lowest level since May 2020, indicating a contraction. The manufacturing sector experienced a deepening downturn, while the service sector saw its first decline in eight months. Germany's economic struggles are also impacting the wider eurozone, with the region at risk of slipping into recession. Rising inflation in services, particularly in Germany, poses challenges for the European Central Bank. Economists predict that Germany will be the worst performer in the euro area, potentially leading to a recession in the second half of the year.