EU sanctions are working! One year since the beginning of the NATO war in Ukraine and implementation of sanctions against Russia, the European Union is technically in a recession, with two negative quarters in a row. GDP fell 0.1% in Q1, 2023 and Q4, 2022. But the economic slowdown is even bigger, if you adjust data for inflation, which was officially 8.1% in April. Food price inflation (food, energy) is higher than official inflation, and caused major drops in consumption.
Retail sales in Germany were down −8.6% in May, with Italy down −4.8% (due to inflation, turnover was +3.2%).
Alone among larger economies, Italy is not in a recession, with an estimated 1.8% growth in Q1 (year on year). But most growth is occurring in exports, especially with its sales to China hitting a record high in February. Thus, if Italy spoils its relationship to China by not extending the 2019 Belt and Road memorandum, it will spoil its only source of economic growth.
