In the second quarter of 2023, the Euro Area experienced little economic growth due to stagnant private consumption, government spending and exports, while private investments increased by almost 1.3% compared to 2022-Q2. Inflation is still high at 6.2%, because of production bottlenecks in the aftermath of the pandemic, still relatively high energy prices, and persistent geopolitical tensions due to the Russian invasion of Ukraine. Nevertheless, it is gradually decreasing, as a consequence of the repeated monetary policy tightening of the ECB in the previous quarters. Unemployment has decreased slightly to 6.47%. The OECD economic outlook expects annual inflation to gradually decline throughout 2023, reaching 3.5% towards the end of the year, and to decrease to 3% until the end of 2024. GDP is expected to grow at an average annual rate between 4.0% and 4.5% until the end of 2024. Unemployment is expected to gradually increase to 6.7% in the second half of the year and to decrease to 6.6% in 2024.

October 2023