The Economic Bulletin of the European Central Bank is one of its most important communication tools, as it presents the economic data and developments of the euro area and of its external environment that are taken into consideration in the decision-making processes of the Governing Council. The current Synopsis of the Economic Bulletin covers the decisions made by the Governing Council on February 3rd, 2022, and the economic data and developments cover the timeframe from December 16th to February 2nd, 2022.
Global economic activity (excluding Eurozone member states) continued to grow in the fourth quarter of 2021, despite the spread of the Omicron mutation. International trade also showed parallel growth, but at a more subdued pace, despite reduced delivery times and lower transport costs. In addition, oil prices rose by 28% from mid-December 2021, as a result of tight supply and increased demand. Finally, annual consumer price inflation for OECD member states stood at 5.8% in November.
Ten-year sovereign bond yields, weighted by euro area GDP, rose to 0.49%. Non-financial corporations equity prices fell by 1.8% in the euro area and by 3% in the United States of America. At the same time, in the Monetary Union bank equity prices rose by a remarkable 11.8% over the review period. Finally, the euro depreciated by 1.1% as measured against the currencies of 42 of the euro area’s most important trading partners.
Euro area GDP is estimated to have risen by 5.2% overall in 2021, following the 6.4% decline recorded in 2020. Also, despite a 4.3% improvement in the third quarter of 2021, private consumption is expected to remain stagnant for the fourth quarter and to move gently in early 2022. Finally, the unemployment rate in the Monetary Union fell slightly in December reaching 7%.
According to Eurostat, inflation based on the Harmonised Index of Consumer Prices [HICP] in the euro area in January 2022 stood at 5.1% from 5% in the previous month, with a significant part of the increase being driven by energy inflation. Indicatively, HICP inflation excluding energy and food fell to 2.3% in January from 2.6% in December. In particular, energy inflation in January was at an all-time high of 28.6%. Similarly, food inflation rose from 3.2% in December to 3.6% in January.
Lending to both firms and households continued to benefit from favourable financing conditions. At the same time, the annual growth rate of loans to the private sector and households increased to 4% and 4.2%, respectively. Finally, in November 2021, the composite lending rate for non-financial corporations fell further to 1.39%, reaching its historical low, while the corresponding rate for households remained almost unchanged at 1.32%.