The OECD detects symptoms of economic slowdown in Europe

Container area of ​​the cargo terminal of the Port of Algeciras, on March 23. Marcos Moreno

The main economies of the Old Continent take a step back.

The Organization for Economic Cooperation and Development (OECD) sees symptoms of a slowdown in Europe: economic activity has fallen by 0.17% in March compared to February in the euro zone, according to its advanced composite indicators published this Monday.

The economic slowdown is due to the effects of the war in Ukraine, as well as the uncertainties that still persist due to the pandemic.

"There is a loss of growth momentum in Europe," says the OECD in its note.

In Germany (-0.13% in March), France (-0.25%), Italy (-0.23%), the United Kingdom (-0.28%) and Spain (-0.16%) the slowdown in recent months.

The Spanish case, if you look at growth month by month, you can see how it entered negative territory since last November and the fall has been accentuated since then.

This is added to the forecasts of the main study houses, which reduce the growth estimates of the Spanish GDP for this 2022 by about three points.

In the euro zone as a whole, the decrease stood at 0.17%.

“A loss of growth momentum is expected, spurred by a contraction in consumer confidence indicators and rising inflation,” adds the OECD.

The agency also warns that this indicator should be interpreted with caution.

As all the organizations that now launch their forecasts warn, the calculations are very exposed to the future of the invasion of Russia.

That is, depending on the duration and intensity of the war, the economic damage may be greater or lesser.

In addition, doubts also persist with the coronavirus crisis and possible new variants that will ruin the recovery and economic opening after a dark period marked by health restrictions.

Outside Europe, among the economies that are within the organization, the trend remains stable.

This is observed with the United States, Japan and Canada.

And among the emerging countries, China and India also maintain stable growth.

The same does not happen with Brazil, where a significant slowdown can be seen.

Among the Latin American Member States of the OECD, the fall of Chile was surprising, with a decrease of 0.48% in March.

This leading indicator of the Organization for Economic Cooperation and Development tries to anticipate with between six and nine months the fluctuations in the economic cycle.

It is based on a series of parameters such as order books, confidence indicators, building permits, long-term interest rates and new car registrations, among others.

On the blow of the Russian invasion of Ukraine, the OECD already published a first impact on the economic impact in mid-March.

Although he clarified that the situation was very uncertain and everything was at the expense of the duration of the offensive, he calculated that the global GDP would lose at least one percentage point.

In the case of the euro zone, the fall would be even greater, of 1.4 points, due to its proximity and its greater dependence on Russia for energy.

Other organizations such as the IMF expect the Ukrainian economy to shrink by a third and the World Bank raised the estimate this Sunday and brings the collapse of Ukraine's GDP closer to almost half.