Euro-Area Economy to Grow Faster in 2024, Survey Shows

According to a recent poll of analysts, the euro-area economy is expected to experience faster growth this year compared to previous forecasts, signalling a positive outlook for the bloc’s largest member emerging from a period of stagnation.

The survey indicates that output in the 20-nation currency union is projected to rise by 0.7% in 2024, surpassing the earlier forecast of 0.5% growth. Specifically, Germany’s gross domestic product (GDP) is anticipated to increase by 0.2%, up from the previous estimate of 0.1%.

These revised forecasts, which also include upgrades for France, Italy, and Spain, reflect the improving sentiment across the region. Stronger-than-expected GDP readings in the first quarter, coupled with a gradual decline in inflation toward the 2% target, contribute to this optimistic outlook. Additionally, the European Central Bank (ECB) is preparing to initiate interest rate reductions, aligning with market expectations for three quarter-point cuts in the deposit rate, currently standing at 4%.

ECB President Christine Lagarde emphasised the positive trend in the eurozone economy, stating that signs of recovery are becoming increasingly evident.

Looking ahead, the survey projects a gradual increase in euro-area inflation, with expectations of reaching the 2% target in the second quarter of next year.