Western Europe Outlook

About this Report:

The lifting of restrictions across Western Europe at the beginning of Q1 2022 has fueled a notable uptick in economic activity, but ongoing global supply shortages and the fallout from the war in Ukraine have derailed the region’s growth outlooks, pushing key markets into a mild recession in Q2–Q4 2022.

Historic levels of inflation, combined with gradual monetary tightening, will put a persistent strain on purchasing power and drive consumer spending across the region into a broad stagnation. Industrial production is set to ease substantially and contract in several markets, such as Germany and Italy, while stagnating elsewhere in the region. High inflation will also bite into governments’ revenues and require substantial fiscal adjustments, leading to milder B2G demand dynamics.

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