EU GDP grew by 0.8% y/y in 2024

According to Eurostat’s preliminary estimates, the EU’s GDP grew by 0.8% in 2024 compared to 2023. In the euro area, this figure increased by 0.7% y/y.

In the fourth quarter of 2024, seasonally adjusted EU GDP grew by 0.1% compared to the previous quarter, and by 1.1% compared to the same period in 2023. In the euro area, the indicator remained at the level of the third quarter and grew by 0.9% y/y.

Experts surveyed by Trading Economics, on average, expected the eurozone’s GDP to increase by 0.1% q/q and 1% y/y in the fourth quarter.

Among the member states, Portugal (+1.5%) recorded the highest growth compared to the previous quarter. It is followed by Lithuania (+0.9%) and Spain (+0.8%). The largest declines were recorded in Ireland (-1.3%), Germany (-0.2%) and France (-0.1%). Annual growth rates were positive for nine countries and negative for three.

At the end of last year, the European Central Bank (ECB) downgraded its forecast for eurozone GDP growth in 2024 to 0.7% from 0.8%. Expectations for economic growth in 2025 were revised to 1.1% from 1.3%, and in 2026 to 1.4% from 1.5%.

Inflation in the euro area in December 2024 increased by 2.4% compared to the same month in 2023. Thus, the indicator accelerated the growth rate compared to November, when it amounted to +2.2% y/y.

The European Central Bank continues to pursue its monetary stimulus policy. On January 30, 2025, the ECB cut all three key interest rates by 25 basis points (bps). Starting from February 5, the deposit rate will be 2.75%, the main refinancing rate will be 2.9%, and the margin loan rate will be 3.15%. Last year, the bank reduced interest rates four times.