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Growth remains finely balanced against recession. Inflation barely slowed in February.

There is resemblance of calm after the storm for the European economy and real estate markets. Following significant repricing in 2022, we expect a smaller scale adjustment in yields this year. moreover, the relative position of the different sectors remains in flux.

Investment regained momentum over 2021 after the Covid-19 crisis to reach pre-crisis levels as economies reopened with control of the pandemic outbreak. It reached a high of €315bn in Q2 2022, almost touching Q1 2020’s record (€315bn).

The drop in gas prices, the decline in headline inflation and the improvement of survey data in December are giving the impression that for the Eurozone, 2023 might be better than expected. However, it is most likely that in twelve months’ time we will look back at 2023 as a recession year, a year of disinflation, and a year when central bank interest rates reached their terminal rate and stabilized.

We are expecting a significant slowdown of the economy in 2023

We are expecting a significant slowdown of the economy, but not a deep recession.