Eurozone
The Eurozone continues to see weak performance in 2024 with minimal recovery expected. Real GDP growth was revised downward from Q4 2023 to 0.8% for the year, sitting slightly above the 0.6% growth recorded in 2023. Tighter monetary policy and elevated inflation weakens demand, which is reflected in the current forecast.
Inflation should remain on a decline but at a slower pace due to persistent price pressures from tight labour markets and a volatile energy sector. The latest data shows a rate of 2.7% for 2024—a marginal downward revision from last quarter.
Geopolitical tensions raise the probability of a global stagflation scenario. Worse-than-expected spillovers could lead to increased energy prices. Inflation would reignite, and a recession ensues with real GDP in the bloc declining by 0.6% in 2024.
The outlook for the Eurozone economy remains highly uncertain and fragile. Growth momentum could accelerate over the year as inflation eases, interest rates drop and foreign demand recovers. But these developments are dependent on the external environment.
Eurozone: Q1 2024 Forecasts
Source: Euromonitor International Macro Model
Note: Annual rates in percentages. Revisions in percentage points.
