The Commission has published a new forecast for the EU economy, with a more upbeat scenario for consumers. After a downturn in economic activity in 2023, inflation rates will continue to drop and the EU economy should gradually grow in 2024. This is largely driven by consumers spending more, thanks to higher wages and more job opportunities.
Concretely, the EU economy should grow 1.0% in 2024. The euro area economy should reach 0.8% of growth. In 2025, GDP will grow even more. Meantime, EU inflation has fallen dramatically since it peaked in 2022. It is expected to wind down to 2.7% in 2024 and to 2.2% in 2025.
The jobs market is also performing well. Despite the slowdown in activity, the EU economy created more than 2 million jobs in 2023. Activity and employment rates of people aged 20-64 hit new record highs in the last quarter of the year. In March 2024, the unemployment rate in the EU stood at a record low of 6.0%.
Some challenges remain. For instance, investment growth is slowing since fewer new homes are being built, which affects various industries. As a result, it is expected that interest rates will drop more slowly than anticipated.
The Commission publishes four economic forecasts throughout a given year, covering GDP and inflation data for all Member States, the EU and the euro area.
For more information
Details on the Spring 2024 Economic Forecast
Press release: Spring 2024 Economic Forecast: A gradual expansion amid high geopolitical risks