European Economics Analyst: Euro Area Outlook 2024: Fading Headwinds

The Euro area had a mixed 2023. Initially, the economy showed surprising resilience to the energy crisis, defying expectations for recession. Growth has disappointed since the spring, however, reflecting ongoing negative effects from high gas prices, a large drag from monetary tightening and weak global industrial activity. As a result, Euro area growth underperformed the US notably this year.

Goldman Sachs Research economists highlight three reasons they expect 2024 to be a better year: diminished headwinds, inflation normalization and a more supportive ECB.