ROME, Jan. 22 (Xinhua) -- Stock Exchanges in the European Union have started 2023 strongly, despite broadly mixed economic data.
Through the close of trading on Friday, the blue chip index on the Paris stock exchange is up 8.1 percent over the last month, stocks on the Frankfurt exchange in Germany are up 7.9 percent over the same period, Milan by 8.7 percent, Amsterdam by 7.2 percent, and in Madrid, the blue chips gained 8.4 percent over the last month.
Those all compare favorably to a 2.5 percent increase over the last month for the composite index on the New York Stock Exchange, the world's largest bourse.
The gains in Europe come despite estimated 0.3 percent economic growth in the fourth quarter of last year for the 19-country euro currency zone and previsions for an economic contraction over the first quarter of this year.
Among the factors pulling down economic growth are record high levels of inflation, energy supply challenges, and unreliable supply chains sparked by the conflict between Russia and Ukraine.
"We don't have all the data yet, but it is clear that stock exchanges are easily outperforming the broad economy," Alessandro Polli, a professor of statistical economics at Rome's La Sapienza University, told Xinhua.
Part of the reason for that is increasing business and consumer confidence -- the belief among companies and individuals that economic conditions are more likely to improve than to deteriorate.
Another factor is the inflation rate: prices in the euro currency zone were 9.2 percent higher at the end of 2022 than they were a year earlier.
Though rising prices reduce consumer spending they also increase the value of products sold, expanding company revenue and -- potentially -- pushing stock prices higher.
The euro zone is also benefitting from a stronger euro. The currency has gained 8 percent against the U.S. dollar over the last 60 days, increasing the buying power of European companies and individuals.
According to Christine Lagarde, president of the European Central Bank (ECB), markets have also been boosted by the reopening of the Chinese economy. Lagarde noted on Friday that an increase in demand for petroleum from the world's second largest economy was a sign that broad demand in the country was recovering.
"There will be constraints, but there will be greater inflationary pressure due to an increase in demand for commodities and in particular for energy," Lagarde said from Davos, where many of the world's top economy and business figures were gathered for the annual World Economic Forum.
The consensus from Davos, according to media reports, is that the economic outlook for European economies was "less gloomy" than it appeared to be six months ago.
"This year won't be brilliant but it will still be much better than feared, and job markets have never been as lively as they are now," Lagarde said.