Euro Area Economy Poised for Robust Growth in 2024 Thanks to Favorable Monetary Policies and Improving Economic Indicators

The euro area economy is predicted to experience more rapid growth this year, according to a Bloomberg survey of analysts. Despite previous forecasts, the output in the 20-nation currency union is projected to rise by 0.7% in 2024, up from the earlier prediction of 0.5%. This growth is mainly due to Germany, which is now expected to see a 0.2% increase in GDP compared to the earlier projection of 0.1%.

The positive outlook for the euro area also extends to major economies such as France, Italy, and Spain, as reflected in the survey results. The region’s improving mood is attributed to better-than-expected first-quarter GDP readings, a gradual decline in inflation towards the 2% target, and preparations by the European Central Bank (ECB) to lower interest rates.

Survey respondents anticipate that the ECB will reduce its deposit rate by three quarter-points this year, bringing it down from its current level of 4%. This aligns with expectations held by money-market investors. In her remarks last month, ECB President Christine Lagarde stated that there are clear signs of improvement visible in the euro zone economy and that it is on a path to recovery.

It’s projected that the economic recovery in the euro area will continue to pick up momentum throughout the year due to supportive monetary policies and improving economic indicators.