21 February 2024

ECON's IPOL: EU economic developments and projections

This briefing provides a summary of the recent economic developments in the EU Member States and gives an overview of relevant economic projections forecasted by major international and EU institutions. Annex 1 includes latest GDP data and forecasts for all EU Member States...

Authors : MAJA SABOL, GIACOMO LOI, MILJA MIESKOLAINEN

EU economic developments and projections

This briefing provides a summary of the recent economic developments in the EU Member States and gives an overview of relevant economic projections forecasted by major international and EU institutions. Annex 1 includes latest GDP data and forecast for all EU Member States and Annex 2 the latest inflation data and developments.

1. Recent growth, unemployment and inflation developments
Figure 1: Headline inflation in EU Member States, in %
According to the latest flash estimate by Eurostat, in the fourth quarter of 2023, seasonally adjusted Gross Domestic Product (GDP) remained stable in the euro area (EA) and grew by 0.1% in the EU compared to the previous quarter. Slovenia registered the highest increase of GDP (1.1%), followed by Portugal and Cyprus (0.8%) and Spain (0.6%). Most significant slowdowns were recorded in Ireland (-0.7%), Romania and Finland (-0.4%) as well as Germany and Lithuania (-0.3%). First estimations for annual growth in 2023 show that GDP increased in both EA and EU by 0.5%.
In the EU, according to the Eurostat, annual inflation (as measured by the Harmonised Index of Consumer Prices or HICP) slowed down to 3.4% in December.
Though inflation continues to slow down, current HICP levels between the Member States still vary significantly (Figure 1). In December 2023, HICP levels varied from the lowest annual rate observed in Denmark (0.4%) and Belgium and Italy (0.5%) to the highest rates observed in Slovakia (6.6%), Romania (7.0%) and Czech Republic (7.6%). In addition, according to latest flash estimate by Eurostat, annual headline inflation stood at 2.8% in the euro area in January 2024. This figure presents a slight decrease from December, where inflation recorded 2.9%.

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