Eurozone key themes 2024 – A fragile recovery will gain impulse

After a year of stagnating activity, the eurozone economy will continue to struggle to gain traction in the near term given multiple headwinds. But we expect a gradual recovery in 2024 that will gather momentum as consumers regain some of their lost purchasing power and financial conditions ease.

What you will learn:

1. Inflation will fall faster than the market and the ECB expects. This means we expect the European Central Bank will cut rates more aggressively than the market anticipates.
2. Following the current weak patch, easing financial conditions, a recovery in consumers’ real incomes and strong household balance sheets, improved global demand, and a cyclical upswing in industry will lead to stronger growth in the second half of 2024.
3. Fiscal policy will represent a rising drag to growth, as government priorities shift from providing support to deficit reduction.