Eurozone Economy Set to Improve in 2024

Turnaround in Eurozone Economy Predicted for 2024, Thanks to Southern European Countries

According to the latest forecasts from the European Commission, the eurozone economy is set to experience a positive turnaround in 2024. This will be due to faster growth in southern European countries, which will help balance out the continued stagnation in Germany. The Commission predicts a growth rate of 1.4 percent for the eurozone this year, an improvement from last year’s growth rate of 0.8 percent.

Looking ahead to next year, the Commission expects a slight downward revision in its growth forecast for the eurozone, with Germany remaining stagnant and France remaining subdued. However, growth in peripheral economies such as Portugal, Spain, and Greece is expected to drive economic expansion within the region.

The Commission noted that economic convergence within southern Europe is outpacing growth in other parts of the EU, leading to further economic integration within the region. Paolo Gentiloni, commissioner for the economy, expressed optimism about the EU economy and predicted that it had turned a corner after a challenging 2023. The forecast predicts a gradual acceleration in growth as private consumption is supported by declining inflation and recovering purchasing power.

Inflation is expected to continue falling over the next few years at a slightly faster pace than previously forecasted. The European Central Bank has anticipated cutting interest rates next month to reflect this progress on inflation. The ECB stated that it would be appropriate to reduce monetary policy restrictions if further evidence showed that inflation was falling towards target levels.

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