The ghost of the recession seems to be moving away from Europe. The gross domestic product (GDP) of the euro zone increased by 0.1% in the last quarter, ending 2022 with an increase of 3.5% year-on-year, three tenths more than expected, according to the first estimates of the statistical agency Eurostat published yesterday.
It's better news than expected. “A contraction in the last quarter has been avoided. We continue to face many challenges, but the prospects for this year seem somewhat more promising today than in autumn", the Commissioner for the Economy, Paolo Gentiloni, congratulated himself yesterday.
The economy in recent months has hardly increased in the euro area, but the improvement of one tenth in the last part of the year removes the omen of a recession. In the European Union as a whole, GDP grew by 3.6% last year and remained stable during the last quarter.
According to the preliminary data available (not all countries have reported yet), Spain is among the countries leading growth in the EU, with 0.2% in the last quarter, the same as Portugal, and behind Ireland. (which registered an increase of 3.5%) and Latvia (0.3%).
Among the great powers of the euro, Spain surpasses France, whose GDP grew by 0.1%. Contrary to Germany, which, as expected, did register a decrease of 0.2% (although also less than expected) or Italy, which fell 0.1%. The economies of Lithuania and the Czech Republic also contracted.
These are more positive scenarios than the forecasts of the European Commission last November, which warned of a much darker situation. Specifically, a 0.5% drop in GDP was then warned for both the EU and the euro countries, with a drop of 0.1% in the first quarter of 2023, with a technical recession expected for the winter. .
The Brussels forecasts foresaw a close of 2022 with growth of 3.2% in the euro zone and 3.3% in the Twenty-seven, in both cases below the Eurostat data. However, it does confirm that the growth of the economy is not going at the same rate as in 2021, before the war in Ukraine, when there was growth of more than 5%. Recently, both the European Commission and the finance ministers of the euro zone and the Twenty-seven are beginning to see positive signs, and they admitted this at the first meeting of the year two weeks ago.
Gentiloni was confident that "a deep recession" could be avoided, although he did not rule out "a short period of contraction." Something that ING bank analysts do not reject either, who believe that a reduction in early 2023 would be possible.
In any case, the indicators are starting to look good. A stronger job market, with a eurozone unemployment rate of 6.5%; an inflation that has been starting to drop since December and seems to have reached its peak; gas and crude oil prices at levels prior to the war in Ukraine, and an increase in confidence in the economy (whose indicators add up to three months of increases) suggest that the scenarios may be positive in the future.
The Community Executive – which presents its economic forecasts at the beginning of February – has always called for prudence up to now in the face of the high degree of uncertainty. Perhaps that is why the joy yesterday was visible, but contained.
