Adel El Gammal, Secretary General of EERA appeared on Euronews' Real Economy on 29 November and gave interviews to Belgian media Le Vif. He discussed the role of energy prices and energy markets in inflation and current energy trends in Europe, as well as expectations ahead of the start of COP28, and the global geopolitical situation weighed down by the war in Ukraine, and rising tensions in the Middle East.
Adel El Gammal, Secretary General of EERA, discussed whether decreasing energy prices would mean more competitive prices and less inflation, for Real Economy on Euronews. He stated that this would depend on a combination of many factors, "all of which are highly uncertain."
Indeed, it is not guaranteed that energy prices will remain low: "We still source in Europe from pipelines and through liquefied natural gas from Russia. So, a total rupture could indeed put the markets under tension", he explained. "And then, of course, there is the crisis in the Middle East. It's easy to imagine that an extension of the conflict - for example, a greater integration of Iran or Saudi Arabia - could obviously completely disrupt the situation".
Additionnally, Adel El Gammal also pointed out that, according to the International Monetary Fund (IMF), nearly half of the inflation experienced in the last two years has been due to an increase in the profit margins of large companies - which have been taking advantage of prices increasing. Therefore, even though inflation has decreased, the situation remains delicate.
"It's challenging, however, to return to an inflation target of 2%. It's a balancing act to try to maintain inflation at acceptable rates without entering a recession. We clearly see the quite serious spectre of possible stagflation here, which means low economic growth or economic decline with a high level of inflation. Unfortunately, it's a risk we will face in the coming quarters", Adel El Gammal warned.
La COP 28 déjà flinguée par son président, le sultan Al-Jaber? (French, paywall)