The global economy grew 2.8% in 2022, a return to normal after an upswing of 6.8% in 2021 and a 3.7% drop in 2020. Economic growth in 2022 reflects a combination of multiple factors. First and foremost, the economic catch-up linked to the end of health restrictions was still marked in developed countries, particularly in Europe, whereas the opposite phenomenon was observed in China due to the adoption of the “zero Covid” policy. Secondly, the confirmation of price rises, particularly for energy and food, exacerbated by the Ukrainian crisis, had a direct impact on household purchasing power. Measures to support consumption, particularly in Europe, largely helped to offset the effects of inflation on growth. Finally, tight monetary policies prompted sharp increases in regulated and market rates, which began to curb economic activity at the end of 2022. Furthermore, the overall labor market was strong, with confirmed labor shortages in many sectors, fuelling wage growth and weighing on activity. This global growth, which is more in line with long-term averages, covers varying situations in different geographic regions. With a growth rate of 3.2%, the euro zone outperformed the USA (up 1.9%), with growth curbed by lower public spending and higher interest rates, and China (up 3%), affected by the “zero Covid” policy. The strong recovery of the tourism sector, finally free from health restrictions, boosted growth in southern European countries (Italy up 3.8%, Spain up 4.6%), while Germany (up 1.8%) suffered due to its industry-focused economy and its dependence on Russian gas and Central European countries. France was in between (up 2.5%). UK GDP grew 4.3%, partly due to a stronger “Covid catch-up” effect and an increase in its public deficit, in contrast to other major developed countries.
In the USA, GDP growth was negative in the first and second quarters (-1.6% and -0.6% respectively), before recovering in the third quarter (up 3.2%). During the full year, GDP is expected to grow 1.9%, after the 5.9% upswing in 2021. While it was in a “technical” recession (two consecutive declines in GDP at an annualized quarterly rate) in the first half of the year, mainly due to the impact of Covid variants on business and supply chain problems, the US economy returned to growth in the second half of the year despite the major change in monetary policy announced by the Federal Reserve. Faced with a rise in inflation that was initially considered temporary, the Fed opted for a very rapid and significant increase in its key rates, which rose from 0.25% to 4.5% between March 16 and December 26, 2022, staggered over a total of seven hikes, a 40-year high. Meanwhile, having reached 6.8% in March, inflation peaked at 7% in June before dropping to 5.5% in November 2022 (PCE Price Index, Personal Consumption Expenditures). Despite the rise in prices and interest rates, household consumption, which remains by far the largest component of US GDP, is expected to grow 2.7% in 2022, nearly 1% more than GDP growth: US consumers continue to dip into their savings and take on debt. Public spending dipped 0.9% in 2022, contributing to the general economic slowdown; the public deficit shrank from 12.3% in 2021 to 5.5% in 2022. Business investment rose 3.8%, and the unemployment rate remained particularly low. Conversely, household investment in residential property fell by 9.8%, mainly from the third quarter onwards, due to the combination of higher financing rates and the sharp rise in the cost of building materials. The contribution of foreign trade remained negative, as imports grew faster than exports.
In the euro zone, GDP rose 3.2%. The region benefited from a more significant post-Covid catch-up than in the USA, and from the alleviation of supply chain problems and shortages. Nevertheless, the growth trend slowed steadily and significantly over the course of the year. The labor market remained strong, and the unemployment rate was very low, which is symptomatic of a generally healthy economy. Within the euro zone, household consumption, combined with near-full employment, explains the solid annual performance of 3.9% growth, while public spending increased by just 0.9%: the public deficit expressed as a percentage of GDP shrank from 5.1% in 2021 to 3.8% in 2022. Business investment grew in line with GDP, while the contribution of foreign trade fell significantly due to the sharp rise in energy prices: following a strong surplus of 2.3% of GDP in 2021, 2022 marked a 0.5% deficit in the euro zone’s balance of payments. Starting in August and mirroring the USA, the ECB decided to raise its key rates from 0% to 2.5% at the end of December 2022 due to persistent inflation (10.6% at the end of October, 9.2% at the end of December, or 6.9% excluding volatile components of the index). In terms of countries, Germany’s economic performance (up 1.8%) was below the euro zone average, due to its greater exposure to energy prices and exports to China, Central Europe and Russia. France’s GDP (up 2.5%) performed
