AT development the unexpected return of the private sector of economic activity Eurozone at the beginning of 2023, while these figures reinforce expectations that, finally, European economy avoid the sharp and deep recession that many analysts and economists predicted.

In particular, Mr. Purchasing Managers Index (PMI) S&P Global rose to 50.2 points in January, while forecasts suggested 49.8 points, contraction territory. It is worth noting that for the first time since June, the PMI index exceeded 50 points, which signals the entry into a growth phase. A number of other economic indicators, such as inflation, which is slowing down, and the fact that this winter is proving to be mild rather than harsh in the midst of the energy crisis, and coupled with supply chain issues being resolved, bolster optimism about the next course of the eurozone countries.

Of course, caution and restraint are needed. While the stabilization of the economy strengthens the signs that the eurozone may not fall into a recession, “the region is by no means safe from danger,” said Chris Williamson, chief economist and head of business at S&P, Global Market Intelligence. “Demand for goods and services continues to fall, but at a slower pace, while rising output price inflation for both goods and services will prompt hawks to push for further tightening and higher borrowing costs.”

OUR European Central Bank has already raised interest rates by 250 basis points since the beginning of the year and is expected to raise them by another 50 basis points next week at the first meeting of the new year. What happens next is unknown: some participants are pushing for a more gradual approach, while others are calling for “large-scale” steps. However, the survey data on the dynamics of the Purchasing Managers’ Index is not positive for all eurozone countries, as the index remains below the 50 mark in both Germany and France.

In any case, the big investment houses have already begun to back away from their assessments of a looming recession in Old Epirus.

In particular, US investment bank Goldman Sachs was among those who raised their forecasts after the European economy showed resilience in late 2022, natural gas prices plummeted and China abandoned its zero-tolerance policy earlier than expected. to the spread of the coronavirus. According to the American financial and investment institute, this year GDP growth of the eurozone countries is expected to be 0.6%, while earlier it was said about a reduction of about 0.1%.

The recession in the eurozone is being postponed or even canceled, finds in its report the financial research company Capital Economics. Its analysts note that the improvement of Europe’s prospects is the main topic of discussion in economic circles. In her opinion, the fact that the recession, which many counted on, did not come, is due to three factors. First, governments provided more support than expected in the form of energy price ceilings and direct subsidies. In Germany, for example, the government paid household gas bills in full for December. Secondly, the normalization of the supply chain around the world was achieved. And this led to a recovery in the production of cars, as well as other industrial goods, which offset the blow to energy-intensive industries such as the chemical and metallurgy industries. Finally, third, the energy crisis that devastated the eurozone economy, squeezing companies and households, has subsided as natural gas prices have fallen since August.