The disinflationary process is well underway and expectations of monetary loosening are well anchored, so attention is now shifting to the outlook for growth in the Eurozone economy in an environment that should be 'normalised' by the end of our forecast horizon. 

It is thanks to the resilience of the labour market and a weaker than usual pass-through from the rise in key rates onto credit conditions that we are forecasting a recovery in spending by private domestic agents. This leads us to build a cautiously optimistic scenario, which translates into GDP growth of 0.7% in 2024 and 1.5% in 2025. 

While there is relative confidence in the short-term scenario, there are still doubts in the longer term: questions remain about the growth permitted by the new configuration of interest rates and inflation, and about the definitive nature of this new monetary normality. In addition, the negative competitiveness shock linked to the war in Ukraine may have more permanently 'damaged' the region's growth potential. The fact that the German economy is lagging behind the other economies in the zone is a confirmation of such a weakness that will persist over the forecast horizon. The hierarchy between a more dynamic periphery than the centre is not called into question in the medium term.