“The resilience of the European economy blows a breeze of optimism in Davos”

VSRising on the snowy sidewalks of Davos, Switzerland, where the 2023 edition of the World Economic Forum is being held, a banker confides under the seal of secrecy: “Davos is like economists, it’s excellent for having a picture of the present, but very bad for predicting the future. » Yet this is what we persist in asking the experts.

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Christine Lagarde, President of the European Central Bank (ECB), faces the same problem. Thursday, January 19, in Davos, she admitted to having been surprised by the resistance of the European economy. “The news has become much more positive in recent weeks”she said. This makes him say that the current year “will not be brilliant, but much better than we feared”.

The day before, the German Chancellor, Olaf Scholz, had also acknowledged that his country had held out in 2022, despite the cassandras who anticipated its collapse for lack of Russian gas to run its factories. This better than expected end of the year is enough to blow a light and unexpected breeze of optimism on the community of leaders, economists and politicians, who finally find their feet in the snow of Davos after three years of absence. (despite a spring release in May 2022).

Chinese cravings welcome

Therefore, as in the stock market, each signal, even the weakest, is interpreted as a confirmation of the thesis. The arrival, Tuesday, January 17, of the Chinese Vice-Premier, Liu He, thus thrilled the CEOs present at the summit. Not by his speech, very conventional, but by his very presence, a sign of the return of the locomotive of world trade. Moreover, the next day, he officially met, in Zurich (Switzerland), the American Treasury Secretary, Janet Yellen, who informed him of her intention to go to China soon.

The return of trade and the consumer appetite of hundreds of millions of Chinese frustrated by three years of isolation will bring some fresh air. But beware, warns Alan Jope, the boss of Unilever, this craving for purchases could also slow down the fall in inflation that we are beginning to observe. This is why, prudently, Christine Lagarde recalled that inflation remains “far too high”although price increases have slowed from the peak of more than 10% in October 2022. The ECB’s objective still remains to return to 2%, which suggests further rate hikes.

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Financiers at BlackRock, the world’s largest asset manager, aren’t so worried about the prospect as they are about the uncertainty surrounding future investments in China. Even open again, the market is now becoming uncertain, which is pushing manufacturers to review their supply chains, particularly to the benefit of India. But the big deal for 2023, which alone is likely to support the recovery, is, according to BlackRock, the craze for the decarbonization of the economy, industry, renewable energies, as if, suddenly, this prospect became the new horizon. of a capitalism in full recomposition.

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