European GDP, 4th Quarter and 2022:  With more data having become available, Eurostat has published an update which, although only minor, is significant.  The previous estimate had GDP growing by +0.1% in both the EU and the sub-set of the Euro-zone but these have now been revised down to a decline of -0.1% for the EU and no change for the Euro-zone.  The significance, of course, is that if Q1-23 turns out to be negative as well, then the EU (although not the Euro-zone) will be defined as being in recession.

For the calendar year of 2022, both the EU and the Euro-zone are now estimated to have grown by +3.5% compared to 2021 (no change to the previous estimate for the Euro-zone but revised slightly lower for the EU from +3.6%).

We now have the quarter-on-quarter growth figures for all but 1 of the 27 Member States – Luxembourg is missing – and these show growth in 15, no change in 2 and a decline in 9 countries.  Of this latter group, 4 – Czechia, Estonia, Finland and Hungary – also saw their economy contract in Q3-22, so are defined as being in recession;  for Estonia, this negative run extends across all 4 quarters of 2022 but for the other 3 countries is only for the latest two quarters.

Also in the final period of last year, among the larger economies, both Germany (-0.4%) and Italy (-0.1%) saw a contraction in their economy, making them vulnerable to being in a recession when the Q1-23 (January to March) data is published at the end of April.

For more details, you can download the Euro-indicators report from their website at (08 March).


European Commission Economic Sentiment Indicator and Capacity Utilisation, February 2023:  The European Commission (EC) draws from a range of surveys to construct confidence indicators for six sectors of the economy and then uses five of these (financial services is not used) make up its Economic Sentiment Indicator (ESI).  The other point to note is that although labelled as “February 2023”, the data collection period was 1st to 20th February so the data really refers to January.

Having improved in each of the previous 3 months, this trend came to an end (or at least a pause) in February with virtually no change in the ESI for either the EU or the Euro-zone.  This was due to a combination of lower confidence in the industry and service sectors balancing an increase for retail trade and among consumers;  sentiment in the construction sector was stable with a strong increase for the financial services sector (although this is not included in calculating the ESI).

Confidence in the industry sector slipped back thanks to a weaker outlook for production expectations, with the assessment of both total order books and stocks of finished products broadly unchanged.  There was a contrast in the two additional questions that are not used to calculate the industry confidence index with a surge in output in the latest three months but a deterioration in export order books.

Among the 6 largest EU economies, the ESI fell in Spain and France, was broadly unchanged in Germany, Italy and Poland and rose sharply in the Netherlands.

The base of the index for the ESI is the long-run average value, so we can get a quick overview by looking at how many countries have an ESI above 100.  In the latest reading, there were 8 countries in this situation, a reduction from the 9 in the “January” survey (Spain dropped below this level and the data for Ireland for “February” is not yet available).  These 8 were Bulgaria, Croatia, Cyprus, Greece, Italy, Malta, Portugal (the new entrant to the 100+ group) and Romania.  This survey also includes the candidate countries with Albania and Montenegro also having an ESI above 100.

You can download the EC report and statistical annex from their web-site at (open the drop down menu for 2023) or you can request it from MTA.

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