Post: Eurozone Economic Outlook: Growth, Inflation and Investment Trends for 2023-2024



The eurozone is expected to witness a slight recovery after almost stagnant growth in the recent past. Various economic institutes present revised growth forecasts, inflation estimates, and investment tendencies for the years 2023 and 2024. This article provides an overview of these predictions, highlighting vital aspects that may drive changes in the European economy.

Growth Forecasts for Eurozone Countries in 2023 and 2024

Based on assessments from various institutes, the average annual growth rate in the eurozone is projected to reach approximately 1.1% by 2024. For countries such as France, Italy, Netherlands Belgium, and Finland, the predicted growth rates range between 0% and 1% in 2023 – indicating weak growth. However, Slovenia and Greece are expected to achieve slightly higher growth figures at around 2%. Non-eurozone countries attending AIECE also anticipate similar growth rates for their respective nations – ranging from -0.9% for Sweden to 1.7% for Denmark.

  • France, Italy, Germany, and Finland institutes predict growth rates oscillating between 0.4% and 1% for 2024.
  • Austria, Belgium, and Netherlands expect growth rates between 1% and 1.5% in 2024.
  • Stronger growth is anticipated in Greece, Slovenia, and Ireland in 2024.

Inflation Estimates and Household Consumption in 2023 and 2024

Several factors, such as monetary policy, credit conditions, and inflation, will impact household consumption in the eurozone countries during 2023 and 2024. Inflation forecasts for 2024 range from 5.1% in Slovenia to 1.9% in Finland, while a gradual increase in households’ purchasing power is expected due to the decrease in inflation.

Most nations are likely to experience stability or a decline in unemployment rates owing to improvements in the labor market, except for France, Netherlands, and Sweden. Meanwhile, the anticipated household savings rates for most countries appear to remain relatively stable through 2024, although over-saving accumulated during the COVID crisis remains unconsumed by households.

Investment Trends for Eurozone Countries in 2023 and 2024

As far as private investment trends are concerned, various factors would negatively influence them by late-2024, such as financing conditions, demand levels, and energy costs. Institutes also report a downturn in several countries’ real estate markets due to rising interest rates after reaching significantly high price levels.

  • Dutch TTF gas prices are projected to average €47/MWh in 2023, €53/MWh in 2024, and €48/MWh in 2025.
  • No significant fluctuations in oil and gas prices are predicted in autumn 2023 but were mentioned as a potential risk factor.

Fiscal Policy Stance in Eurozone Countries for 2024

Out of 23 institutes that participated in a survey regarding fiscal policy:

  • Eight believe it will be slightly restrictive in their respective countries in 2024.
  • One institute predicts a very restrictive stance in its country.
  • Five consider it neutral in their countries.
  • Seven expect slightly expansionary policies.
  • Two institutes foresee very expansionary fiscal policies in their respective countries.

The number of institutes advocating for expansionary fiscal policies has declined over the past year, mainly due to decreased energy prices which have reduced the requirement for budgetary support for households and businesses.

In conclusion, the eurozone is poised for a modest recovery in the years 2023 and 2024. Economic growth predictions showcase varied trends across different countries. Inflation estimates range widely, impacting household consumption throughout the regions. Additionally, investment tendencies are influenced by multiple factors such as market demand, financing conditions, and energy costs. Fiscal policies across nations are also expected to vary, with some leaning towards restrictive measures and others adopting a more expansionary approach.