Special
The drop in energy prices has greatly improved Spain’s economic outlook. Government support measures and the European pandemic recovery fund will also support domestic demand. Yet the economy continues to suffer from high inflation and significantly interest rates.
Special
The eurozone economy benefits from the fall in energy prices, generous government subsidies and high job security. Yet inflation continues to be high and we foresee interest rates to stay elevated for longer, which hurts private demand.
Conjunctuurbeeld
The Eurozone economy grew in the final quarter of 2022, even though domestic demand contracted. While the near-term prospects for the economy have improved a little, the outlook is far from bright and medium-term challenges remain considerable.
Special
Italy’s new government has the thankless task to balance fiscal support amid the energy crisis and keeping public finances in check. Unless energy prices and bond yields come down significantly, debt affordability challenges could materialise soon.
Economisch commentaar
Er zijn grote verschillen in inflatie binnen de eurozone. Dit komt voornamelijk door de component energie, indirecte energie effecten en verschillend overheidsingrijpen. De inflatieverschillen gaan voorlopig niet weg; een serieuze uitdaging voor de ECB.
Special
Over the past 18 months, the Eurozone has witnessed the sharpest rise in inflation since its inception. But the inflation wave also stands out from a longer, post-World War II perspective. What has received less attention, though, is the huge variation in inflation rates across member states.
Economisch commentaar
In the third quarter, GDP growth slowed in the Eurozone. From Q4 onwards, we expect the Eurozone economy to contract for several quarters. Looking beyond the short term, we expect the energy crisis to haunt Europe for years.
Podcast
Europa zit in een energiecrisis. Ondanks de recente daling verwachten economen Stefan Groot en Erik-Jan van Harn dat de gasprijs nog jaren erg hoog blijft. Terugkeren naar de oude lage prijzen lijkt uitgesloten. Overheden moeten ingrijpen om kwetsbare huishoudens tegemoet te komen en essentiële industrieën binnen Europa te behouden.
Special
Italian elections on September 25 are set to be won by the conservative right coalition. Importantly, Italy will continue to support sanctions against Russia and eurozone membership, but frictions with the EU and the risk of fiscal slippage will increase.
Economisch commentaar
Europa gaat momenteel door een gascrisis, omdat Rusland gaskraan steeds verder dichtdraait. De vraag is: komen we de aankomende winter wel door?
Special
There is a real risk of gas shortages this winter or in spring in certain Eurozone member states, such as Germany and Italy. Despite the search for alternatives for Russian gas, drastic cuts in gas demand are required in Germany.
Conjunctuurbeeld
In the second quarter, Italy’s economy performed better than expected and GDP is again larger than pre-pandemic. Still, a recession looks inevitable going forward, due to the cost of living crisis. After elections, policy could move significantly right.
Conjunctuurbeeld
The Eurozone economy beat expectations in the second quarter, as it grew by 0.7%. We still expect the eurozone economy to enter a shallow recession in the winter, although the risks of a severe contraction due to an energy crisis have increased.
Conjunctuurbeeld
Spanish inflation is becoming ever more broad-based and rapidly eating into households’ purchasing power. This will dent consumer spending once the reopening boost fades. GDP growth will slow over the coming quarters and turn negative towards year-end.
Special
EU leaders have agreed to ban all Russian seaborne oil imports. The ban, amid already high inflation, intense supply chain pressure and tightening financial conditions, will push the Eurozone into a recession.
