In this article, we will be taking a look at the 12 European countries with the best economy right now. To skip our detailed analysis of the European economy, you can go directly to see the 5 European Countries with the Best Economy Right Now.
European Economy: Ongoing Crisis and Outlook
Europe has long been considered to be an important economic and industrial hub with some of the most advanced economies on the continent. The world has witnessed Europe’s growth over centuries with a high standard of living. As we mentioned earlier, the average annual growth rate for Europe has been 1.8%, according to data from the IMF. Following a swift post-pandemic expansion in 2021 and 2022, the European economy has lost momentum. Europe’s stability and economic growth took a massive blow with Russia’s invasion of Ukraine in early 2022 and it was the time when the economy was getting stable following a heavy hit from the COVID-19 pandemic in 2020. The downside risks continue to haunt the global economic outlook. The increased tensions in Gaza and Russia’s aggression against Ukraine are major uncertainties apart from other market risks.
2023 has been a mixed year for the European economy, suffering from an energy crisis and defying expectations for recession. The negative consequences of high gas prices, tightening monetary policy, and feeble global industrial activity have been key to the downside in the region’s economy. Compared to the US economy in 2023, Europe’s growth has underperformed. As per the 2023 Autumn Forecast by the European Commission, the EU and euro area GDP growth is expected to be 0.6% in 2023. For 2024, the EU GDP is expected to improve to 1.3% and is further projected to gain momentum in 2025 with a growth rate expected around 1.7%.
On November 9, Goldman Sachs shared the 2024 outlook for the euro area. The economy is expected to get better in 2024. Analysts at Goldman Sachs expect a notable improvement in real disposable income as headline inflation continues to slow down. While nominal wage growth is projected to remain firm, which will support consumer spending. In addition, underlying inflation is also projected to normalize in 2024, as core inflation has calmed more than expected in the past few months, with sequential core inflation around 2.5%. Core inflation is projected to reach 2.7% year-over-year in mid-2024, compared to the previous forecast of 2.9%. By the end of 2024, inflation is expected to lower to 2.2% year-over-year and reach 2% by the end of 2025.
In 2024, growth drivers are likely to vary across European countries. Germany is expected to observe growth driven by higher consumer spending, with improving real disposable income and savings rates. Analysts expect France to experience a minor rebound in real disposable income. In France, the key metric will be the normalization of the household saving rate, which has remained higher in other European countries. Whereas, in Italy, consumer spending is expected to be boosted by the reacceleration in implementation of the Recovery Fund, which should support capital expenditure. Spain should gain momentum from both continued consumption resilience and upward investment growth. As per the outlook for 2024, Germany, Italy, France, and Spain are expected to reach growth rates of 0.6%, 0.7%, 1.1%, and 1.7%, respectively.
Key Players in the European Market
The European market is home to some of the leading companies from the best economies in the region. Germany is known for its automotive and IT sector. German companies including Mercedes-Benz Group AG (ETR:MBG) are two of the top giants in these sectors with a global presence. Nestlé S.A. (OTC:NSRGY), another European conglomerate, based out of Switzerland has a massive global presence. Anheuser-Busch InBev SA (NYSE:BUD) is a Belgian firm famous for its drinks and breweries.
The Mercedes-Benz Group AG (ETR:MBG) is a German multinational automotive corporation that plays a massive role in the European economy. On November 27, Mercedes-Benz Group AG (ETR:MBG) announced that it inaugurated its first German charging hub in Mannheim, Germany. Mercedes-Benz Group AG (ETR:MBG) is setting new standards for fast, safe, and green charging for electric vehicles. The charging hub in Mannheim will offer a charging capacity of up to 300 kW. Mercedes-Benz Group AG (ETR:MBG) plans to establish almost 2,000 of its charging stations by the end of 2030, offering up to 10,000 fast-charging points.
Nestlé S.A. (OTC:NSRGY) remains a top corporation that continues to play an important role across global economies. On November 23, Nestlé S.A. (OTC:NSRGY) announced the launch of its first product containing Human Milk Oligosaccharides (HMOs) in China, under the Wyeth Illuma brand. Nestlé S.A.’s (OTC:NSRGY) penetration of its first HMO product in China is followed by the approval for the use of such bioactives by China’s National Health Commission. Here is what, Laurent Alsteens, Global Head of Early Childhood Nutrition at Nestlé said:
“We are dedicated to leverage our innovation expertise and advance our research in early life nutrition. This is our first launch of HMO products in China. We are delighted to bring the benefits of HMOs and 35 other vital ingredients in this Illuma growing-up milk to young children.”
Anheuser-Busch InBev SA (NYSE:BUD) has around 169,000 employees based in nearly 50 countries. The company sells more than 500 brands in almost 100 countries. On November 6, Anheuser-Busch InBev SA (NYSE:BUD) announced the appointment of Donna Lorenson as Chief Communications Officer. Lorenson joined the company from her position as Chief Corporate Affairs Officer at Kenvue – a Johnson & Johnson (NYSE:JNJ) spinoff. On October 24, Anheuser-Busch InBev SA (NYSE:BUD) announced a new multiyear marketing deal with Ultimate Fighting Championship (UFC). The partnership between the brewer, BUD Light, and UFC will take effect on January 1, 2024. Anheuser-Busch InBev SA’s (NYSE:BUD) CEO, Anheuser-Busch, said:
“Anheuser-Busch and Bud Light have always been on the cutting edge of iconic sporting moments that fans remember forever, and reuniting with UFC is a continuation of this industry-leading legacy. As one of the largest and longest standing sport sponsors, we are excited to work with UFC to celebrate our passionate fans while always making a positive impact in communities across America.”
We talked about some of the leading European companies playing a major role in the global economy. Now let’s take a look at the 12 European countries with the best economy right now.
12 European Countries with the Best Economy Right Now
Our Methodology
To compile our list of the European countries with the best economy right now, first, we shortlisted the 20 countries with the highest GDP (PPP). As a simple definition, PPP is calculated by subtracting price differences and nominal changes in the local currency and the US dollar. We then ranked the 12 countries with the best economy based on the highest GDP per capita from the list of 20 countries with the highest GDP (PPP). The list is ranked in ascending order of this metric. We sourced data from the International Monetary Fund (IMF) that lists global GDP (PPP) and GDP per capita by country. We also took the data of the Gini coefficient from Credit Suisse’s Global Wealth Databook 2023 and mentioned it for our countries. The Gini coefficient describes income inequality or wealth distribution. A Gini coefficient of 0 shows perfect equality and a Gini coefficient of 100 means perfect inequality.
Note: We did not include Türkiye in Europe as it has a relatively small area in Europe compared to Asia.
12 European Countries with the Best Economy Right Now
12. Russia
GDP Per Capita (2023): $35,310
GDP (2023): $5.06 Trillion
Officially the Russian Federation spans Eastern Europe and Northern Asia. The country has a debt-to-GDP ratio of 18.9. Russia has a GDP per capita of $35,310 and a Gini coefficient of 86.90% and ranks 12th among the European countries with the best economy right now.
11. Romania
GDP Per Capita (2023): $41,030
GDP (2023): $780.8 Billion
Located in the Southeast of Europe, Romania is famous for the forested region of Transylvania. Romania has a debt-to-GDP ratio of 50.5. With a GDP per capita of $41,030 and a Gini coefficient of 69.30%, Romania is one of the European countries with the best economy right now.
10. Poland
GDP Per Capita (2023): $45,540
GDP (2023): $1.71 Trillion
Officially the Republic of Poland is a Central European country. Poland has a GDP per capita of $45,540 and a Gini coefficient of 68.40%. The country’s debt-to-GDP is 49.10. Poland makes it to our list of the European countries with the best economy right now.
9. Spain
GDP Per Capita (2023): $50,470
GDP (2023): $2.41 Trillion
Located on Europe’s Iberian Peninsula, Spain is one of the strongest economies in the region. Spain has a GDP per capita of $50,470 and a Gini coefficient of 68.30%. The country’s debt-to-GDP ratio is 111.6. Spain ranks ninth on our list of the European countries with the best economy right now.
8. Italy
GDP Per Capita (2023): $54,260
GDP (2023): $3.19 Trillion
Italy is located along the Mediterranean coastline with historic landmarks. Italy has a Gini coefficient of 67.80% and a debt-to-GDP ratio of 144.4. With a GDP per capita of $54,260, Italy makes it to our list of the European countries with the best economy right now.
7. United Kingdom
GDP Per Capita (2023): $56,840
GDP (2023): $3.87 Trillion
The United Kingdom is one of the largest economies in the world. The country has a Gini coefficient of 70.20% and a debt-to-GDP ratio of 101.9. The United Kingdom has a GDP per capita of $56,840 and ranks among the European countries with the best economy right now.
6. France
GDP Per Capita (2023): $58,770
GDP (2023): $3.87 Trillion
Located in Western Europe, France is one of the strongest economies on the continent. France has a GDP per capita of $58,770 and a Gini coefficient of 70.30%. The country’s debt-to-GDP ratio is 111.8. France ranks sixth on our list of the European countries with the best economy right now.
Click to continue reading and see the 5 European Countries with the Best Economy Right Now.
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Disclosure: None. 12 European Countries with the Best Economy Right Now is originally published on Insider Monkey.