Inflation set to continue to fall in 2024

The latest economic forecasts from the European Commission predict a continuing and welcome decline in the rate of inflation across the EU, with inflation almost halving from 6.5% this year to 3.5% in 2024. The picture is even rosier in the eurozone, where inflation should drop to a lower level of 3.2%. These mark levels not seen since before the start of the energy crisis in 2021,however, still well above the ECB target of 2%.

Such lower rates of inflation are good news for a wide range of industries, including our own. According to the Commission, “While the moderation in the past year was mainly driven by the sharp fall in energy prices, it has now become increasingly broad-based across all main consumption categories, beyond energy and food.”

Meanwhile, unemployment rates remain low across the EU, with a level of 6% for September expected to remain stable throughout 2024. While this is good news for consumer spending, the picture is more nuanced when it comes to long-term and continuing difficulties in recruitment for established industries such as pulp and paper.

Economic growth, as we have covered here before, remains positive but fragile. As we reported in September, GDP growth across Europe is expected to stay below 1.5% next year, with the European Commission now forecasting 2024 growth of 1.3% across the EU. In 2025, growth levels are expected to improve further – alongside further falls in inflation.