emerging
European Recovery and Transformation
Europe is expected to experience a modest recovery, driven by disinflation, easing monetary policy, and strategic investments.
Timeframe
near-term
Impact areas
Detailed Analysis
Europe is on a path to recovery, with growth dependent on continued disinflation, a less restrictive monetary policy from the ECB, and a gradual recovery in consumption and demand. "Europe’s growth next year will rely on continuing disinflation and a less restrictive monetary policy, with fiscal support constrained by European Commission rules."
Context Signals
High savings rates across Europe expected to support consumption
Next Generation EU plan projects to drive investment recovery
Heterogeneous performance expected across Eurozone countries
Edge
Strategic investments in areas like green transition and Industry 4.0 could create unique opportunities for investors.
The widening productivity and investment gap with the US necessitates bold policy action to restore long-term competitiveness, potentially leading to innovative solutions.
Small and mid-cap companies could outperform as the ECB eases monetary policy and growth stabilizes.
