According to new forecasts from the European Commission, the eurozone economy is expected to improve in 2024, with faster growth in southern Europe offsetting continued stagnation in Germany. The Commission predicts a growth of 0.8 percent this year and 1.4 percent the following year, with Germany and France experiencing subdued growth while countries in the periphery like Portugal, Spain, and Greece are expected to perform better.
The Commission stated that economic convergence within the EU is progressing further due to the stronger performance of southern European economies. Commissioner for the Economy, Paolo Gentiloni, mentioned that the EU economy showed signs of improvement in the first quarter of the year, indicating a turning point from the challenges of 2023. He expects a gradual acceleration in growth as private consumption benefits from declining inflation, recovering purchasing power, and employment growth.
Inflation is predicted to continue falling over the next couple of years at a faster pace than previously forecasted. The European Central Bank is expected to cut interest rates next month to reflect the progress on inflation. The forecasts attribute the decline in inflation to lower retail energy prices in 2023 and easing underlying inflationary pressures in the second half of the year. If inflation continues to fall towards the target,
