In the last quarter of 2022, the Euro Area experienced no economic growth relative to the previous quarter due to stagnant export levels and public spending, and a contraction in private consumption and investments. GDP is 1.84% higher than in the same quarter of 2021. Persisting bottlenecks affecting global value chains, rising energy prices, and uncertainty related to the Russian invasion of Ukraine have raised inflation, now at almost 10%, relative to the previous year. Unemployment has been unaffected though and remains stable at around 6.7%. The OECD economic outlook expects annual inflation to gradually decline throughout 2023, reaching 5% towards the end of the year, and to decrease to 3% by the end of 2024. GDP is expected to grow at an average annual rate of 4.5% until the end of 2024. This projection has been revised upwards compared to the last quarter, because the negative effect on GDP of ECB’s restrictive monetary policy (aimed at slowing down inflation) has been revised downwards. Unemployment is expected to gradually increase to 7.1% until the end of 2023, and then to slightly decrease in 2024.

April 2023