European-wide recession will be avoided in 2023, says AEW

AEW has updated its base case scenario assumptions with the expectations that inflation will normalize in 2023 and a European-wide recession will be avoided.

In its 2023 Mid-year European Outlook, AEW said it anticipates a slow and steady economic recovery, as financial markets absorb recent central bank rate hikes and inflation and bond yields begin to lower. AEW deems the downside scenario less likely than previously imagined, as it assumes a recession and lingering high inflation. However, the United Kingdom is expected to have one of the lowest economic growth rates among the 20 countries covered in the ereport.

Returns across all sectors from 2023 to 2027 are expected at 6.8 percent per annum, a significant increase from the 4 percent they were half a year ago. Of the real estate sectors, logistics is expected to generate the highest returns during the next five years at 8.5 percent per annum, with prime retail shopping centers at 7.9 percent per annum. D