In the first quarter of 2023, the Euro Area experienced no economic growth relative to the previous quarter due to a contraction in private consumption and public spending, as governments withdrew fiscal support measures to tackle high energy prices. GDP is 1.3% higher than in the same quarter of 2022. The strong rebound after the pandemic crisis, rising energy prices, and uncertainty related to the Russian invasion of Ukraine have raised inflation, now at 8.13% relative to the previous year. Unemployment remains stable at 6.6%. 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. Despite the current tightening of the monetary policy by the ECB to slow down inflation, GDP is expected to grow at an average annual rate of 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.

July 2023