Several analysts warn that after the summer a growing, interlinked set of challenges could unfold in the economy. An energy squeeze driven by the Ukraine conflict and higher inflation may push Europe toward recession by year’s end, a scenario that also raises concerns for North American markets watching Europe’s energy dynamics closely.
Hilario Alfaro, head of the Madrid Business Forum, spoke about the potential impact, noting that government steps to cushion the crisis may fall short. Measures like temporary restrictions on energy use or limits on cooling settings have been questioned for their effectiveness. In this context, Alfaro urged leaders to set a strong example in policy and practice for households and businesses alike.
This is how other European countries are saving energy
The Madrid Business Forum, together with other economic institutions, weighs a possible recession for Spain as a real risk. Forecasts suggest that the downturn could surface in late 2022 and early 2023, with signals echoing from Germany and the United States as early indicators. A broader energy and economic pullback is already on the radar for European policymakers and markets.
Namely, government projections show growth for the region, but the pace may slow in the near term. Analysts with banks and large financial groups are noting increased warnings about a forthcoming slowdown, raising concerns across the financial sector in Spain and beyond. The question remains how quickly any contraction would materialize and how deeply it would affect employment, investment, and consumer confidence [Citation: Madrid Business Forum briefing].
Major institutions like Caixabank have indicated that a recession cannot be ruled out. Large firms such as Mapfre report rising signs of a possible downturn, even as Spain’s GDP continues to expand modestly this year and is projected to remain positive next year. The broader picture shows a complex mix of resilience and risk, with energy costs and global demand as key drivers that could either temper or accelerate the downturn for North American observers tracking European markets [Citation: Financial sector analyses].