Finally, despite the war in Ukraine, despite the return of inflation, Europe should, at the beginning of 2023, narrowly escape the recession which threatened it at the end of 2022. In this context, the executive revised its forecasts upwards , Monday, February 13. In 2022, growth is now at 3.5% in the European Union (EU) as in the euro zone. It should then mark time and reach 0.8% and 0.9% respectively (against 0.3% in its previous forecasts) in 2023 then 1.6% and 1.5% in 2024.
“In 2022, growth in Europe was stronger than in the United States and China”welcomed Paolo Gentiloni, the European Commissioner for the Economy, during an interview with three newspapers, including The world. Before continuing: “I never imagined that in my lifetime I would see stronger growth in Italy than in China. But it happened in 2022”.
Not only that, the job market, with a historically low unemployment rate (6.1% at the end of 2022), has so far resisted and helped to ward off the specter of recession. But above all, the Ving-Sept have withstood the energy crisis better than expected. While, in the summer of 2022, they feared running out of gas, after Gazprom had turned off the tap, Europeans avoided the worst by diversifying their sources of supply and reducing their consumption. They were also lucky that the weather was relatively mild. In the four corners of the Old Continent, governments have also supported consumers and businesses to help them cope with soaring prices.
Uncertainties
Today, gas is worth less than before Russia invaded Ukraine on February 24, 2022. And the futures contracts on the markets do not suggest a rebound to the levels that the European Union has been able to know the summer of 2022, when the megawatt hour was worth more than 300 euros (compared to 55 euros today). In this context, inflation, after peaking at 10.6% in October 2022, has started to decelerate. It should have reached 9.2% (8.4% within the euro zone) in 2022 before falling to 6.4% in 2023 (5.6% in the monetary union) and 2.8% in 2024 (2.5%).
For non-energy products, the decline in inflation is less clear. The prices of industrial metals, in particular, have started to rise again and the prospect of China returning to the world market, now that it has eased its anti-Covid restrictions, can be worrying. This is also one of the hazards weighing on the Commission’s forecasts, even if a resumption of Chinese growth would also mean an increase in world trade from which Europe would benefit. The uncertainty surrounding these predictions is “high”, warns the former Italian Prime Minister, who cites, among other things, the tightening of monetary policies. But “the main risk is that of geopolitical tensions, that of the evolution of the war” in Ukraine, continues Paolo Gentiloni.
You have 52.37% of this article left to read. The following is for subscribers only.