Europe's Economy Stalled by Energy Costs and Shipping Disruptions, Extending Over a Year of Weak Growth
• Europe's economy showed zero growth in the fourth quarter of 2022, extending over a year of stagnation amid high energy prices, costlier credit, and a downturn in Germany.
• Disruptions to shipping through the Suez Canal from conflicts in the Middle East are increasing costs and threatening higher inflation.
• While inflation has dropped from double digits, Europeans' pay and purchasing power still lag pre-surge levels.
• Germany, formerly an economic model, shrank 0.3% with issues like high fuel prices and lack of digital infrastructure investment.
• Conflicts in the Middle East are raising shipping costs around Africa, which could boost core inflation 0.5% and delay ECB interest rate cuts.