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  • The final quarter of 2022 and 2023 will be challenging as economic and political headwinds are increasing.
  • Recession risks are rising as consumer and industrial confidence indicators are plummeting.
  • Inflation is currently on a 40-year high but will moderate in 2023 because of base effects and tighter monetary policy.
  • Supply chain risk is still above pre-pandemic levels but has fallen in recent months with maritime shipping costs dropping (also linked to the weaker economic outlook).
  • Payments performance in Europe improved in mid-2022 but Ireland and the UK performed against the trend and saw longer delays in B2B payments. • The number of business failures in the EU rose in April-June 2022, a fifth consecutive quarter of increase.
  • That said, the number of business failures still stands below pre-pandemic readings and some countries (such as Germany and Italy) still continue to report improvements.
  • Looking ahead, credit risk in Europe will rise as the economy is slowing, interest rates are rising quickly and banks are likely to tighten lending. • Elections in France, Sweden and Italy in Q2 and Q3 2022 ended with at least partial victories of antiestablishment far-left and far-right parties
  • Policy making will become more complicated as approval ratings for incumbent governments will fall amidst a cost of living crisis and the looming recession.
  • Companies should assess counter-party risks closely and team up with trusted advisors to minimise the adverse impact of the deteriorating political and economic environment.

Download this full report from the Global Outlook store: https://bakering.global/product/bulletin-economic-outlook-oct-2022/