Eurozone Exits Recession Thanks To Chief Economies

Eurostat, the EU’s statistical arm, reported a 0.3% quarter-over-quarter increase in both the euro area and the EU. During Q4 2023, GDP reflected a 0.1% decrease. Analysts attributed this positive uptick to expedited growth in the four chief economies in the Eurozone. Year on year, consumer prices increased by 2.4% in April 2024, mirroring the March 2024 trend.

After persistently high inflation, the light at the end of the tunnel seems to be in sight for the bloc. France, Italy, Spain and Germany topped analyst predictions, and it appears that the German industrial sector is lifting its head after a downtrend.

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Expectations are that the European Central Bank (ECB) will ease interest rates in June 2024, which will further boost the Eurozone’s economy. According to Bloomberg, the monetary institution foresees financial stabilisation if inflation continues to ebb towards the 2% mark.

Services inflation, which dropped to 3.7% in April 2024 after sitting at 4% for five months, also provides a ray of hope. It is bolstered by the reduction in food and energy prices, which decreased slightly from 2.9% to 2.7%. Bloomberg financial specialists commented:

This moderation in services-price inflation is what the ECB needs to see to cut rates. Absent a shocker on wages, or a surge in commodity costs, this will happen in June. Significantly stronger-than-expected GDP growth shows the economy standing up reasonably well to high rates …

The EUR/USD closed at 1.0672 on Tuesday, 30 April 2024.