ECB Growth Projections Euro Area Sep 2024 Monetary Policy meeting

The economic outlook for the eurozone remains cautious. The ECB staff projections suggest that the economy will grow at a modest pace, with GDP expected to rise by 0.8% in 2024, followed by increases of 1.3% in 2025 and 1.5% in 2026. These estimates reflect a slight downward revision compared to earlier projections, largely due to weaker domestic demand​.

Economic activity in the region continues to be hampered by weak private consumption and reduced business and housing investment, despite some positive contributions from government spending and net exports. While the ECB expects a gradual recovery, the growth rate remains subdued, with limited signs of a significant upturn in the near term​.

Economic Environment

The broader eurozone economy remains fragile, with financing conditions still restrictive. Economic activity is hindered by weak private consumption, limited investment, and a decline in household spending. Despite the resilience of the labour market, with an unemployment rate of 6.4% as of July, the ECB projects that employment growth will continue to slow​​.

The ECB remains focused on ensuring inflation returns to its 2% medium-term target and will maintain restrictive policies until this objective is achieved. The ECB also emphasized that its monetary decisions will be guided by ongoing assessments of the inflation outlook, economic developments, and the strength of monetary policy transmission​.