INFLATION - "THE NUMBER 1 ENEMY " AND ITS CONSEQUENCES FOR THE EUROPEAN ECONOMY

Abstract

With the pandemic abating and the prospect of further lockdown episodes fading, the whole world was looking forward to the strong recovery predicted for 2022. In addition to economic growth, forecasts were generally agreed that inflation, which had risen in the previous months, would begin to fall as the basic effects of the short period of deflation of the pandemic. Not only, for a number of reasons, were these expectations not fully fulfilled, but February 2022 pushed events in a totally unexpected direction, ushering in an era of difficulties of an unprecedented complexity in the last decades of European history . While the direct consequences of the war in Ukraine on the insurance industry remain rather minor, the indirect consequences, such as volatility in capital markets or weaker growth prospects, weigh much more heavily. Among these, the galloping inflation that has hit all the world's economies is "Enemy No. 1" on a global scale, its impact on the insurance business being complex and substantial.