Statistics agency Eurostat reported that the euro zone economy entered a recession in the first quarter of this year. This news comes after negative revisions to Germany’s and Ireland’s first quarter Gross Domestic Product (GDP), which pushed the 20-member bloc to a negative 0.1% first quarter GDP reading after a previous reading of 0%. Economists also noted they aren’t optimistic about growth in Europe the remainder of the year.

What’s the bottom line? The globe is interconnected, and economies of different countries rely on each other for trade. As a result, recessions tend to be globally synchronized because loss of demand in one country tends to pull activity in other areas down. While there is usually an average of 50% of global economies in a recession at the same time, certain circumstances like the COVID pandemic can lead to a larger level of synchronicity. This ongoing situation remains important to monitor in the months ahead.