Economic developments

The year 2013 was characterized by an improvement in the global economic environment. The implementation of structural reforms in some European countries and the resumption of exports in others gave rise to signs of recovery, reflected in a significant narrowing in the spread against the German Bund and, in some cases, a return to positive GDP growth after years of economic stagnation and widespread recession. In Europe, 2013 confirmed the emergence from recession, with some countries that recorded GDP growth and others whose GDP contracted but at a slower pace than the levels of 2012: Ireland (0.5%), Spain (-1.2%), Italy (-1.8% compared with -2.5% in 2012), Greece (-3.6% compared with -6.4% in 2012) and Portugal (-1.5% compared with -3.2% the previous year).

In the United States (growth of 1.9% in 2013 compared with 2.8% in 2012), the easing of uncertainties related to the tapering of quantitative easing and the extension of negotiations on the budget and the public debt helped buoy the financial market, with a positive impact on the real economy and employment. The countries of South America performed well (Argentina 5.5%, Brazil 2.1%, Chile 4.0%, Colombia 4.0% and Peru 5.0%), although towards the end of the year, growth rates exhibited increased volatility due to the sudden withdrawal of cash inflows from the industrial economies. Similar growth was also achieved in China (+7.7% in 2013), a country that is still grappling with environmental problems and excess credit levels that could hinder future development. Other strong performers included the United Kingdom (+1.9% in 2013), thanks to the continuation of robust expansion in the private and public consumption supporting the increasingly solid recovery in growth, and Japan (+1.7% in 2013), although that country experienced a weakening of private consumption and investment while public consumption and investment strengthened considerably. The eastern European countries are still affected by significant social imbalances, fragile institutional arrangements and economic models that will have to demonstrate their reliability in promoting a long period of sustained growth (GDP growth of 1.3% for Slovakia and 1.3% for Russia in 2013).

In the 2nd Half of the year, inflation in Europe subsided from its average of 2.3% in 2012 to an average of 1.3% in 2013. More generally, the recovery has not remained confined to European countries but, albeit fragmented and uneven, it has involved both the industrial countries (+1.3%) and the emerging economies (+4.7%).

Banks’ demand for liquidity in 2013 caused 3-month Euribor to decline significantly over the year, posting an average of 0.22%, well below that recorded in 2012 (0.57%). In foreign exchange markets, the euro/dollar rate rose from an average of 1.29 in 2012 to an average of 1.33 in 2013. The increase is primarily attributable to flows of money toward the peripheral European countries and to the rise in 3-month Euribor above its level at the end of 2012 (0.19%). This level was higher than both USD Libor and the policy rate of the ECB. In order to facilitate access to credit by institutional investors and support the level of investment, the European Central Bank lowered its rate on main refinancing operations to 0.25%. International stock market indices posted gains for 2013 as a whole that were about twice those achieved the previous year, thanks to their especially strong showing in the 2nd Half of the year following the publication of positive macroeconomic data and the continuation of expansionary monetary policies. For example, the US index rose by no less than 29.9% and that in Japan rose by 51.9%, with the latter undoubtedly boosted by the ultra-expansionary economic policies put in place by the Japanese government.

The following table shows the growth rates of GDP in the main countries in which Enel operates through its subsidiaries.

Annual real GDP growth

 2013 2012 
Italy  -1.8  -2.6 
Spain  -1.2  -1.6 
Portugal  -1.5  -3.2 
Belgium  0.2  -0.1 
Greece  -3.6  -6.4 
France  0.2  -
Bulgaria  0.8  0.8 
Romania  3.5  0.7 
Slovakia  1.3  1.8 
Russia  1.3  3.4 
Argentina  5.5  1.9 
Brazil  2.1  1.0 
Chile  4.0  5.6 
Colombia  4.0  4.2 
Mexico  1.3  3.9 
Peru  5.0  6.3 
Canada  1.8  1.7 
USA  1.9  2.8 
Enel Open Data

Source: National statistical institutes and Enel based on data from ISTAT, INE, EUROSTAT, IMF, OECD and Global Insight.