Recession avoided for the EU economy, but challenges remain
8 June 2023 - Today, BusinessEurope published its Spring 2023 Economic Outlook. It highlights that falling energy prices through the mild winter have helped steer the EU economy away from recession, but the situation remains challenging for many companies.
BusinessEurope Director General, Markus J. Beyrer said: "The EU economy has avoided recession, but many challenges remain. Rising interest rates make access to finance more expensive for businesses. The majority of our member federations expects a stagnation in investment in the short term. To achieve the digital and green transition, policy-makers need to use all the tools at their disposal to attract more investments to the EU. This means providing breathing space on regulatory and reporting requirements and speeding up permitting procedures, particularly for energy projects.
More than half of our member federations view the overall business climate as generally better than the extremely uncertain outlook in the autumn. Energy prices and supply chain disruptions are declining, but companies, especially SMEs, continue to operate in a highly uncertain environment. In 2023, bankruptcy declarations reached the highest level in the last eight years.
Inflation rates have recently fallen, but to keep EU’s economy on track to the recovery, we urge social partners to continue efforts to avoid a damaging wage-price spiral."
- The EU economy is forecasted to grow by 0.7% in 2023 (an upward revision of 0.1% from our Autumn forecast) and 1.6% in 2024.
- Euro area inflation rate is forecasted to gradually decline but to remain elevated at 5.4% in 2023 and 2.7% in 2024.
Check our Spring 2023 Economic Outlook here.