European growth trust JEDT will benefit from EU economic re-opening

JPMorgan European Discovery Trust plc

JPMorgan European Discovery Trust plc (LON:JEDT) has announced their ten largest investments in % of total assets as at 31 December 2021.

Alten3.6%
D’Ieteren Group3.0%
Reply S.p.A.2.8%
Nexans2.5%
Sanlorenzo2.5%
Bravida2.4%
Vitrolife2.4%
Helvetia2.4%
Bechtle AG2.3%
A.S.R.2.3%
Total26.1%
Excludes Investments in Liquidity stocks

OECD economic forecast summary

In December 20221, OECD noted: After a strong rebound in 2021 with GDP growth of 5.2%, as confinement measures were gradually lifted, economic activity in the euro area is projected to expand by 4.3% in 2022 and 2.5% in 2023. Growth will be supported by strong consumption, with households reducing their saving rate, and higher investments owing in part to national and European recovery plans. Unemployment is projected to decline to close to pre-crisis levels. 

With the rapid reopening of the economy, supply chain bottlenecks and the rebound in energy prices are pushing up inflation. Although inflation dynamics vary across the euro area, this is not expected to last, with inflation returning to levels below the ECB objective by the end of 2022.

European Commission economic forecast summary 

The European Commission also provided a positive growth outlook despite mounting headwinds for the EU economy in their detailed Autumn 2021 report.

The EU economy is rebounding from the pandemic recession faster than expected. However, the supply side of the economy struggles to keep pace with the abrupt swings in the level and composition of global demand. This affects several key industries, including global logistics and the production of raw materials and microprocessors. Sporadic localised pandemic-related lockdowns together with emerging labour shortages add to the disruptions. 

Growth in the EU is expected at 4.3% and 2.5% in 2022 and 2023, respectively

In 2022, the propelling forces of the re-opening are set to fade out, while supply bottlenecks loosen and energy prices abate. Growth is expected to be supported by an improving labour market, still high savings, favourable financing conditions and the full deployment of the Recovery and Resilience Fund (RRF). Economic activity in the EU is thus projected to expand by a solid 4.3% (same as in the euro area) in 2022, before decelerating to 2.5% (2.4% in the euro area) in 2023. Importantly, although the pace of growth is projected to remain uneven across countries and sectors, the EU is set to return onto its path of economic convergence. By early 2023, moreover, real GDP is expected to converge to the steady growth path that the economy was set to follow before the pandemic.

(Source: European Commission, Autumn 2021 report)

JPMorgan European Discovery Trust plc (LON:JEDT) is an investment trust company. The Investment Trust JEDT objective is to achieve capital growth from a portfolio of quoted smaller companies in Europe, excluding the United Kingdom.

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