The global economy is slowing down moderately. However, according to Prometia’s latest analysis, the latest data shows better-than-expected results for the fourth quarter of 2022, resulting in positive carry-over effects for 2023 in the United States, China, and the Eurozone. Behind the great stability of the economic situation is the reopening of the Chinese economy (after the closures linked to the Zero-Covid policy implemented by Beijing), the drop in gas prices in Europe, the decline in inflation in the United States and also the improvement of confidence indicators. In light of these recent developments, Experts revised forecasts for GDP growth in 2023 up to 1.1% in the USA (from +0.4% indicated in January), to 5.1% in China (from +4.4%) and 0.7% in the Eurozone (up from + 0.1%)).
Italian GDP 2023 expected at +0.7%
The same performance is expected for our country, despite the fact that the Italian GDP in the fourth quarter showed a slight decline (-0.1%, quick estimate) due to the decline in agricultural and industrial activity against only marginal growth in services. On the one hand, domestic demand (including inventories) made a negative contribution, while net exports made a positive contribution. Overall, the economic growth achieved in the whole of 2022 was 3.9%, with a positive carryover effect of 0.4% in 2023. With this push factor, Prometia estimates show a revised growth rate for Q1 2023 of -0.1% (-0.3% in the January report) and an annual growth rate of 0.7% (from +0.4%). New tensions on gas prices are not expected until the end of the year.
Slow return expected due to inflation
In Italy, which lags behind in Europe, energy prices are starting to incorporate a lower gas cost, translating into weaker inflation (10.1% in January after 11.6% in December). The monthly modest decrease in total energy prices was due to the increase (+0.7%) in non-regulated energy products (energy and fuels in the deregulated market), mainly caused by the re-imposition of excise duties. In January, inflation was 0.2% MoM: the negative contribution of energy prices was offset by increases in the prices of food, goods and services, due to supply chain transmission. The scroll is expected to continue, leading to only a gradual decline in the core number over the next few months. actually, In 2023, inflation is expected to be 5.6%, compared to 8.1% last year.
Household spending levels remain high
Good news from the labor market and the availability of spending. Employment (temporary and permanent) shows a return to growth in the fourth quarter of 2022 and this – according to Prometeia – is a sign of firm confidence in future demand. but High levels of savings are the main driver of spending. From a peak of 19.6% in the second quarter of 2020, the household saving rate has fallen to 7.1% in the third quarter of 2022, below levels seen in the pandemic (8% in 2019). For the first time since 2019, the fiscal balance (savings minus non-financial investment) turned negative, due to slower growth in savings and higher investment. It should be noted, however, that the cumulative financial savings – in excess of historical values - between the fourth quarter of 2019 and the third quarter of 2022 still amount to nearly 150 billion euros.
High rates drive portfolio reallocation
Meanwhile, according to Prometia’s analysis, the first effects of the ECB’s credit crunch and market volatility are seen downstream. The household fiscal deficit in the third quarter of 2022 reflected €9.1 billion in net sales of financial assets, mainly stocks and other equity, and liabilities increased by €1.5 billion. Another signal is the reallocation of household portfolios due to higher interest rates: in the third quarter of 2022, deposits increased less than in the same period in 2021 and bonds increased by 10.7 billion euros (against a decrease in the same period last year). year). The latest data on current accounts confirm that in 2022 total household deposits increased by less than in 2021 (€14.5 billion versus €48.7 billion).
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