Western Europe’s steady recovery from recession
Western Europe continues to be renowned for its affluence, political stability, and ease of doing business. However, rapid economic growth of the sort apparent in Asian economies, particularly China, is no longer visible in Western Europe. The region has recovered from an overall slump in growth, caused by the European debt crisis starting in 2010, that had the highest impact on Greece, Spain and Portugal. The combined real GDP of the region is expected to grow by 2.4% in 2018.
Financial services and manufacturing have the highest economic contributions
Financial intermediation and real estate has the most significant contribution to the region’s economy, with London, Paris and Frankfurt recognised as prominent financial centres. The impact of Brexit is resulting in uncertainty overshadowing the sector. Germany has a dominant manufacturing industry that results in a high volume of trade in machinery and electrical equipment.
Uncertainty regarding Brexit
With the UK referendum in 2016 setting up the country’s exit from the EU, negotiations are ongoing for a post-Brexit scenario. Since the UK represents one of the most important trading partners within Western Europe, the general uncertainty surrounding Brexit is likely to damage consumer and business confidence.
High dependence on intra-EU trade has its own risks
Western Europe has a high reliance on trade with countries in the EU, exposing it to subdued demand from the region. With the USA also resorting to protectionist measures under the Trump administration, Western European countries are exploring trade opportunities with emerging markets in Asia Pacific and Africa.
Introduction
Scope
Key findings
Regional Economic Overview
Western Europe on a path to recovery after recessionary phase
Services comprise the majority of Western Europe’s gross value added
Western Europe records high GDP per capita despite recent struggle
Majority of remittances come from within the EU
Foreign direct investment channelled to business-friendly markets
Western Europe has successfully maintained its currency stability
Impact of a eurozone crisis on the German economy
Impact of a No-Deal Brexit on the UK economy
Impact of a global downturn on the French economy
Regional Trade Profile
Trade in services is critical in sustaining Western Europe’s balance sheets
Huge industrial bases of Germany and the UK maintain busy trade flows
Western Europe needs to reduce its high reliance on intra-EU trade
Regional Government Finances
High levels of public debt a concern for key markets in Western Europe
Investment in infrastructure comprises the bulk of government spending
Country Snapshots
Austria: economic structure and foreign investment overview
Austria: inflation, exchange rates, and export profile
Belgium: economic structure and foreign investment overview
Belgium: inflation, exchange rates, and export profile
Denmark: economic structure and foreign investment overview
Denmark: inflation, exchange rates, and export profile
Finland: economic structure and foreign investment overview
Finland: inflation, exchange rates, and export profile
France: economic structure and foreign investment overview
France: inflation, exchange rates, and export profile
Germany: economic structure and foreign investment overview
Germany: inflation, exchange rates, and export profile
Greece: economic structure and foreign investment overview
Greece: inflation, exchange rates, and export profile
Ireland: economic structure and foreign investment overview
Ireland: inflation, exchange rate, and export profile
Italy: economic structure and foreign investment overview
Italy: inflation, exchange rates, and export profile
Netherlands: economic structure and foreign investment overview
Netherlands: inflation, exchange rates, and export profile
Norway: economic structure and foreign investment overview
Norway: inflation, exchange rates, and export profile
Portugal: economic structure and foreign investment overview
Portugal: inflation, exchange rates, and export profile
Spain: economic structure and foreign investment overview
Spain: inflation, exchange rates, and export profile
Sweden: economic structure and foreign investment overview
Sweden: inflation, exchange rates, and export profile
Switzerland: economic structure and foreign investment overview
Switzerland: inflation, exchange rates, and export profile
Turkey: economic structure and foreign investment overview
Turkey: inflation, exchange rates, and export profile
United Kingdom: economic structure and foreign investment overview
United Kingdom: inflation, exchange rates, and export profile