Economic recovery in the EU slows more than expected. The Covid-19 pandemic, high energy prices, which drag inflation soaring, and supply problems are holding back growth. The result is that, after the record expansion of 5.3% recorded in 2021, the European economy will grow by 4% in 2022 (the autumn forecast was 4.3%) and will fall to 2.7% in 2023 (the previous estimate was 2.3). This is what emerges from the European Commission’s winter economic forecasts. Italy resists: upward estimates for 2021, going from 6.2% to 6.5%, and downward for 2022, from 4.3 to 4.1%. The growth forecast for 2023 remains unchanged, at 2.3% (returning below the EU average).
It’s just a temporary slowdown in growth. This is the message that the European Commission wanted to send with the new economic forecasts. A message of relative optimism as the monetary policy context is rapidly changing.
Both the vice president, Valdis Dombvrovskis, and the commissioner for the economy, Paolo Gentiloni, insist on the transitory slowdown in the pace of economic recovery, which has now given rise to a phase of growth that is not ephemeral. Dombrovskis reports that “looking to the future, we expect to return to high gear by the end of the year, as some of the bottlenecks to manufacturing activity ease”. Gentiloni is sure: “We expect growth to pick up speed again this spring”.
Dombrovskis highlights the fact that the European economy “has now regained all the ground it lost during the height of the crisis, thanks to the success of vaccination campaigns and coordinated economic policy support. Unemployment has reached an all-time low. These are. important results “. Of course there are shadows and the main ones are the” significant increase in inflation (especially in energy prices) together with bottlenecks in the supply chain and in the labor market “. Factors that “are holding back growth”. In any case, “the fundamentals of the EU remain solid and will be further strengthened when the countries begin to implement their recovery and resilience plans”. Gentiloni: “
Commissioner Gentiloni recalls that “many headwinds cooled the European economy this winter: the rapid spread of Omicron, a further increase in inflation driven by soaring energy prices and persistent supply chain disruptions. headwinds that should gradually fade, we expect growth to pick up speed again this spring “.
Nonetheless, the former Italian premier warns: “Price pressures are likely to remain strong until the summer, after which inflation is expected to decline as energy price growth moderates and supply bottlenecks ease. , uncertainty and risks remain high “.
Commissioner Gentiloni dwelt on the risks and uncertainties of the current phase, speaking of “balanced risks for growth and upside risks for inflation”. In general, uncertainty and the risks surrounding economic forecasts remain high “also because the future trend of the pandemic remains unpredictable”.
The balance of risks to growth appears balanced, Gentiloni explains: “On the negative side, the current wave of infections could have a more lasting economic impact than assumed, bringing new disruptions to critical supply chains. Outside the EU. , this risk is greater, as vaccination rates in many regions remain low. On the improvement side, however, household demand could accelerate more than expected, as already experienced in the period following the reopening of economies in 2020 and last year. Furthermore, the investments promoted by the Recovery Fund could generate a greater impulse to the activity through greater inter-sectoral and transnational repercussions “.
As for the risks deriving from current geopolitical tensions (crisis over Ukraine and relations with Russia in the first place), Gentiloni says, “here we have something other than a downside risk of an economic forecast: peace, stability and growth. economic are obviously closely connected “. Gentiloni: “Italy at the level of pre-pandemic GDP in recent weeks”
“The context of Italy is quite clear: the economy tends to resume pre-pandemic growth levels in recent weeks, therefore faster than imagined some time ago “Commissioner Paolo Gentiloni said so.
The forecasts for Italy are for positive growth in 2022 and 2023: “We also considered in the estimates the influence of the implementation of the investments envisaged by the national plans as if everything were going in the right direction and for this reason it is very important that this happen “.
In relation to the effect of the increase in interest rates on countries such as Italy and Greece, Gentiloni said that “in the estimates we take into account the expectations of the markets on interest rates, we are not unaware” of what is currently happening. However, you added that the president of the ECB, Lagarde, reiterated recently that any maneuver (that was decided) “will be gradual”. In any case, “real interest rates are currently in negative territory and this indicates that financial conditions remain favorable even for high-debt countries”.
As for the recovery of decisive sectors of the economy, such as tourism, the commissioner for the economy, asked in particular to pronounce himself on the issue of beach concessions, Gentiloni said that for the latter “there is no need to review the rules, the solution indicated by The commission is simple and concerns starting tenders for existing concessions taking into account professional skills, but without favoring subjects over others because one thing is to take into account the social repercussions, another thing is to favor this or that over the competition “. The labor shortage has reached all-time highs
In the last quarter of 2021, the unemployment rate fell below its pre-pandemic values ​​and in December it reached historic lows of 6.4% in the EU and 7% in the euro area. Employment in the EU increased by 0.9% in the third quarter, adding about 1.8 million jobs and closing the gap with pre-pandemic levels. The gap in hours worked has narrowed to just one percentage point. These are the data pitted by the economy commissioner Paolo Gentiloni at the press conference to present the new estimates on growth and inflation that indicate how the labor market has recovered.
However, Gentiloni noted, “employment growth is not keeping up with the increase in labor demand: work is an increasingly important factor limiting production in various sectors and the Commission’s business surveys show that the reported labor shortages reached all-time highs in the industry, service and construction sectors in January. ”
Going forward, the Commission’s January employment expectations indicator still showed robust labor demand, although it eased slightly from its November peak. Overall, Gentiloni concluded, “we continue to foresee an evolution of employment in tandem with economic activity”.

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