Italian elections on September 25 are set to be won by the conservative right coalition. Importantly, Italy will continue to support sanctions against Russia and eurozone membership, but frictions with the EU and the risk of fiscal slippage will increase.
Dutch Housing Market Quarterly
Increased interest rates and energy crisis depress demand for owner-occupied homes. House prices are easing and are expected to decline slightly during 2023.
On September 14, the European Commission proposed specific intervention measures to address the soaring energy prices. Such intervention is a complex task, and any approach has its own drawbacks. This report reviews the proposal and contextualises it, among all the possible ones.
Economic Quarterly Report
After strong growth rates in early 2022, inflation is expected to cause economic contraction in late 2022 and early 2023.
Europe is facing very high prices for both natural gas and electricity. In many European countries, the prices of both commodities are related, most of the times. However, electricity prices are not pegged to natural gas prices. This article explains how electricity prices are established.
There is a real risk of gas shortages this winter or in spring in certain Eurozone member states, such as Germany and Italy. Despite the search for alternatives for Russian gas, drastic cuts in gas demand are required in Germany.
The advance estimate for Q2 GDP growth shows that the US is in a ‘technical recession’, which means two consecutive quarters of negative GDP growth. Meanwhile, the strong labor market is telling a different story. Therefore, it is not likely that the current economic circumstances will lead the NBER to call an official recession in H1.
In the second quarter, Italy’s economy performed better than expected and GDP is again larger than pre-pandemic. Still, a recession looks inevitable going forward, due to the cost of living crisis. After elections, policy could move significantly right.
We continue to predict slowing growth and even expect two consecutive quarters of slightly negative growth in 2022Q4 and 2023Q1. Data currently available paints a rosier picture.
The Eurozone economy beat expectations in the second quarter, as it grew by 0.7%. We still expect the eurozone economy to enter a shallow recession in the winter, although the risks of a severe contraction due to an energy crisis have increased.