Europe dominates inflation and economic data appears which facilitates aid to Ukraine

They were all wrong. The European Commission, the European Central Bank, the World Bank, the IMF, the OECD and all European national banks, as well as dozens of private organizations, have seen that from the end of 2022 Europe would go into recession and that the 2023 would be an economically disastrous year, with rising unemployment, rising inflation and a recession. all failed.

The recession which was inevitable and whose depth was only doubted does not appear in any medium-term horizon and the European Commission has already started this Monday to slightly raise its economic growth forecasts.

There will be no recession in Europe in 2023 or 2024. A black swan can always appear to upset plans, but not even Vladimir Putin’s war in Ukraine and its correlate in the form of an energy and inflation crisis could put a European economy showing signs of recession into recession. signs of resistance higher than expected.

The European Commission announced on Monday that the recession will be avoided and that the European economy will grow by at least 0.8% this year.

It’s dingy growth, but it’s not the four horsemen of the economic apocalypse expected just six months ago. Brussels is also improving its forecasts for inflation, which is expected to approach “normal” levels (about 2% per year) in 2024.

The new data even corrects the growth of 2022. If less than a year ago the European Commission predicted that in 2022 the European Union would grow by just over 2% to sink in 2023, it now calculates that growth in 2022 was 3 .5%.

The Directorate General for the Economy of the European Executive assures that the improvement in forecasts and data is due to factors such as the “diversification of supply chains” and a significant drop in methane consumptionwhich together with the achievement of the replenishment of gas reserves led to the price of gas falling to pre-war levels.

Brussels also acknowledges that its employment forecasts were wrong. Now he says that “the European labor market continued to perform strongly, with unemployment at the lowest rate (6.1%) for 20 years, the two decades of the single currency.

what’s coming

The European Commission still sees “headwinds”. indicate how risks high energy prices for households and businesses and core inflation, which was still slightly increasing in January, “damaging the purchasing power of households”.

He also warns that as long as there are inflationary pressures there will be a restrictive monetary policy which will reduce economic activity and curb investment. They are practically the same announcements that he launched six months ago and that the macroeconomic and labor evolution has shown exaggerated.

Economic growth forecasts are up on October. If then, among the four largest European economies, it was only clear that Spain would narrowly escape recession, now the other three are doing comfortably.

Spain will grow by 1.4% in 2023, but also Italy (0.8%), France (0.6%) and Germany (0.2%). In 2024, Spain will continue to grow the most in the top four (2%), France will move to 1.4%, Germany to 1.3% and Italy to 1%. The European average will be lower than Spain with 0.8% in 2023 and 1.6% in 2024.

Inflation will also continue to decline. If in 2022 the Eurozone average was 8.4%, in 2023 it will drop to 5.6% and in 2024 to 2.5%. Spain improves on these two figures with 4.4% for 2023 and 2.3% for 2024. That year Germany (2.4%), France (2.5%) and Italy (2.6% ) will be very close.

The economy and finance ministers of the 20 countries that share the euro (Croatia joined on 1 January) have reached the same conclusions as the European Commission after spending a year warning of the abyss the euro would fall into. economy in early 2023.

The good news allows us to continue to help Ukraine, both financially and in arms, because the major critics in Europe against that aid have always been those who saw the economic damage to the European economy resulting from the energy crisis and inflation . Neither the Germans have had to heat with wood in recent months nor have there been any blackouts in Europe due to a lack of Russian gas. European economies have been able to stop buying hydrocarbons from Moscow and get new energy suppliers in a few months.