FX.co ★ Eurozone economy may see stagnation in 2024

According to the Financial Times (FT), citing research performed by analysts, the eurozone economy will grow by 0.6% in 2024. At the same time, the likelihood of stagnation may increase in the new year, thus affecting the region's GDP.

The Financial Times polled 48 economists, most of whom concluded that in 2024, the EU economy would hardly show a confident rise. Nevertheless, the region is unlikely to face a deep recession. “What’s more, we continue to see a gradual recovery in 2024, rather than further deterioration,” Paul Hollingsworth, chief European economist at BNP Paribas, said.

Analysts suppose that by the end of the year, the economy will expand by 0.6%. The same growth was expected by the end of 2023. Against this backdrop, the eurozone GDP may face stagnation in 2024.

Most respondents are sure that the economic downturn will be short-lived. Thus, in the first quarter of 2024, the economy may slightly grow. However, by the end of 2024, the region’s GDP may slide. That is why one cannot exclude stagnation.

Meanwhile, the outlook provided by currency strategists at the European Central Bank and the International Monetary Fund turned out to be more positive, as it suggests 1.2% growth.

In September 2023, Clare Lombardelli, the OECD's Chief Economist, foresaw a 0.6% increase in the EU economy by the end of the previous year. She supposes that changes in fuel prices pose the main risk to the region. Earlier, in November, the European Commission downgraded its economic outlook to 0.6% from 0.8%. The ECB management also lowered its expectations of economic growth in 2024 to 0.8% from 1%.