More gloomy prospects. European Central Bank (ECB) will cast a shadow over the pace of the economy in the coming period. second half of the year in the latest monthly Economic Bulletin. “Inflation remains undesirably high and the governing council is expected to stay above its target. [del BCE] for a certain period of time. The latest data show slowdown in growthIt blurs the outlook for the second half of 2022 and beyond.”
Business applying at the July meeting 0.50 point interest increaseAfter announcing it will be 0.25, a mechanism to stop the last and rise risk premiums The effect of the general price increase in Spain, which was 10.8% in July, 38 years ago, and 8.6% in June, in the euro area, causes the debts of countries to decrease.
Prices skyrocketed even more in Spain, where the food in the shopping cart weighs more than the European average. For example, oil, which climbed more than 56% in a year and a half and cereals became 17% more expensive, dairy and eggs 16% and meat 10% more expensive over the same period, above the European average. According to a study by the Bank of Spain on the impact of the increase in food raw materials on final prices.
The report underlines thatEconomic activity in the euro area is slowing down and “Russia’s unjustified aggression against Ukraine, an ongoing drag on growth”. In this sense, in addition to the brake on the growth predicted by the increase in inflation, “continuous supply constraints and increasing uncertainty“And he warns that companies continue to be confronted. higher costs and interruptions in your supply chainsalthough there are signs that some supply bottlenecks are easing.
During the second and third quarters, however, economic activity continued to benefit from the reopening of the mainly supported economy. service industry; a strong labor market and support fiscal policy. “As people begin to travel again, Gezi helps the economy in the third quarter of this year. Consumption is supported by household savings and a strong labor market during the pandemic.”
In turn, fiscal policy helps to cushion the impact of the war in Ukraine. Those most affected by high energy prices. In any case, temporary and specific measures must be designed to limit the risk of fueling inflationary pressures,” he warns.
lower industrial growth
Purchasing Managers Index (PMI) in June manufacturing production It contracted below 50 for the first time since June 2020. This indicated weakening activity in the manufacturing sector, mainly due to severe supply chain disruptions, higher commodity prices as a result of the Russian invasion of Ukraine, and increased general uncertainty. .
In addition, new manufacturing orders PMI continued to decline in June, while PMI supplier lead times showed some relief in June, although supply bottlenecks remained stable. In contrast, the activity service industry It recovered in the second quarter of 2022 and is expected to strengthen further in the third quarter.
The European Commission’s Economic Sentiment Indicator (ESI) fell slightly in June and Slowdown in growth in the second quarter. Business confidence improved somewhat in manufacturing and services, while it worsened in retail and construction. Reflect persistent concerns about high inflation amid growing uncertainty and severe supply chain disruptions. most consumer confidence decreased further in July. To a lower level than was recorded at the start of the Covid-19 crisis.