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1、Economic and Financial AffairsWinter 2024ISSN 2443-8014(online)European Economic ForecastINSTITUTIONAL PAPER 268|FEBRUARY 2024EUROPEAN ECONOMYEuropean Economy Institutional Papers are important reports analysing the economic situation and economic developments prepared by the European Commissions Di

2、rectorate-General for Economic and Financial Affairs,which serve to underpin economic policy-making by the European Commission,the Council of the European Union and the European Parliament.DISCLAIMER The views expressed in unofficial documents do not necessarily represent the views of the European C

3、ommission.LEGAL NOTICE Neither the European Commission nor any person acting on behalf of the European Commission is responsible for the use that might be made of the information contained in this publication.This paper exists in English only and can be downloaded from https:/economy-finance.ec.euro

4、pa.eu/ecfin-publications_en.Luxembourg:Publications Office of the European Union,2024 PDF ISBN 978-92-68-04243-4 ISSN 2443-8014 doi:10.2765/01964 KC-BC-23-075-EN-N European Union,2024 Reuse is authorised provided the source is acknowledged.The reuse policy of European Commission documents is regulat

5、ed by Decision 2011/833/EU(OJ L 330,14.12.2011,p.39).For any use or reproduction of material that is not under the EU copyright,permission must be sought directly from the copyright holders.CREDIT Cover photography:iS European Commission Directorate-General for Economic and Financial Affairs Europea

6、n Economic Forecast Winter 2024(Interim)EUROPEAN ECONOMY Institutional Paper 268 CONTENTS iii A delayed rebound in growth amid faster easing of inflation 1 1.Euro area and EU outlook 2 1.1.Setting the scene 2 1.2.The global economy:recent developments and outlook 3 1.3.Financial markets 9 1.4.Recent

7、 economic developments in the EU 13 1.5.The outlook 24 1.6.Risks to the outlook 27 2.Prospects by Member States 29 2.1.Belgium 29 2.2.Germany 29 2.3.Estonia 30 2.4.Ireland 31 2.5.Greece 31 2.6.Spain 32 2.7.France 33 2.8.Croatia 33 2.9.Italy 34 2.10.Cyprus 35 2.11.Latvia 36 2.12.Lithuania 36 2.13.Lux

8、embourg 37 2.14.Malta 38 2.15.The Netherlands 38 2.16.Austria 39 2.17.Portugal 40 2.18.Slovenia 41 2.19.Slovakia 41 2.20.Finland 42 2.21.Bulgaria 43 2.22.Czechia 43 2.23.Denmark 44 2.24.Hungary 45 2.25.Poland 46 2.26.Romania 46 2.27.Sweden 47 Statistical Annex 49 Previous European Economic Forecasts

9、 55 LIST OF TABLES 1.Overview-the Winter 2024 interim Forecast 1 1.1.International environment 5 LIST OF GRAPHS 1.1.Global PMIs 3 1.2.Global inflation 5 iv 1.3.Export prices in international comparison 5 1.4.10-year bond yields in international comparison 5 1.5.Brent oil historical and futures price

10、s 6 1.6.Natural gas historical and futures prices 6 1.7.Electricity historical and futures prices 6 1.8.Short-term euro interest rate expectations at different dates 9 1.9.Volatility in short-term interest rate expectations 9 1.10.Yield curves in the euro area and the US 10 1.11.Bank lending and fun

11、ding cost,euro area 13 1.12.Real GDP growth and its contributions,EU 13 1.13a.Real disposable income,EU 14 1.13b.Use of real disposable income,EU 14 1.14.Change in inventories,EU 17 1.15.Gross value added in the EU across sectors 17 1.16.Short-term indicators,EU 18 1.17.Measures of labour market tig

12、htness,EU 18 1.18.Wage growth and its diffusion by economic activity in EU Member States 19 1.19.Profit margin and unit labour costs,EU 19 1.20.Inflation breakdown,euro area 20 1.21a.Inflationary pressures-processed food,euro area 20 1.21b.Inflationary pressures -non-energy industrial goods,euro are

13、a 20 1.21c.Inflationary pressures -services,euro area 20 1.21d.Inflationary pressures -unprocessed food,euro area 20 1.21e.Inflationary pressures -energy,euro area 20 1.22.Measures of underlying price pressures,euro area 21 1.23.Contributions to the decline in annual headline inflation in the euro a

14、rea 21 1.24.Factors limiting production,EU 24 1.25.ESI/Confidence and PMI,euro area 24 1.26.Investment plans by ripeness:EU Manufacturing 25 1.27.Saving intentions and saving rate,EU 25 1.28a.Consumer goods-BCS Selling Price Expectations vs.momentum in consumer prices,euro area 26 1.28b.Food-BCS Sel

15、ling Price Expectations vs.momentum in consumer prices,euro area 26 1.29.Forecast of annual HICP inflation compared to Autumn 2023 Forecast,EU and euro area 27 1.30.Inflation expectations in the euro area derived from implied forward inflation-linked swap rates 27 LIST OF BOXES 1.1.Impact of the Red

16、 Sea crisis on the EU economic outlook 7 1.2.EU non-financial corporations in a challenging economic environment 11 1.3.Household savings and wealth in the euro area implications for private consumption 15 1.4.Food inflation in the euro area what were the driving forces behind the extraordinary surg

17、e in 2022-2023?22 A DELAYED REBOUND IN GROWTH AMID FASTER EASING OF INFLATION Winter 2024(Interim)Forecast 1 This Winter interim Forecast lowers the growth outlook for this year and sets inflation on a lower downward path than projected last autumn.Economic activity in 2023 is now estimated to have

18、expanded by only 0.5%in both the EU and the euro area.The growth outlook for 2024 is revised down to 0.9%in the EU and 0.8%in the euro area.In 2025,economic activity is still expected to expand by 1.7%in the EU and 1.5%in the euro area.EU HICP inflation is forecast to fall from 6.3%in 2023 to 3.0%in

19、 2024 and 2.5%in 2025.In the euro area,it is projected to decelerate from 5.4%in 2023 to 2.7%in 2024 and to 2.2%in 2025.Last years modest growth largely owes itself to the momentum of the post-pandemic economic rebound in the previous two years.Already towards the end of 2022,the economic expansion

20、came to an abrupt end and activity has since been broadly stagnating,against the background of falling household purchasing power,collapsing external demand,forceful monetary tightening and the partial withdrawal of fiscal support in 2023.The EU economy thus entered 2024 on a weaker footing than pre

21、viously expected.After narrowly avoiding a technical recession in the second half of last year,prospects for the first quarter of 2024 remain subdued.Still,there have been positive developments since the 2023 Autumn Forecast,particularly when it comes to inflation.The sharp fall in energy prices was

22、 followed by a broad-based and faster-than-expected moderation of price pressures.As energy supply keeps outstripping demand,spot and future prices for oil and especially gas are now significantly lower than assumed in the Autumn Forecast.Retail energy prices are therefore set to fall further,helpin

23、g EU recover some of the competitiveness lost during the energy crisis.Despite mild upward pressure from higher shipping costs in the wake of Red Sea trade disruptions,underlying inflation continues on a steady downward path.Credit conditions are still tight,but markets now expect the loosening cycl

24、e to start earlier.Remarkably,the EU labour market continues to perform strongly.All in all,the conditions for a gradual acceleration of economic activity this year appear to be still in place.As inflation decelerates,real wage growth and resilient employment should support a rebound in consumption.

25、Despite falling profit margins,investment is set to benefit from a gradual easing of credit conditions and further deployment of the Recovery and Resilience Facility(RRF).The pace of growth is set to stabilise broadly in line with potential,as of the second half of this year.Protracted geopolitical

26、tensions and the broadening of the Middle East conflict to the Red Sea tilt the balance of risks towards more adverse outcomes.Additional trade disruptions could bring renewed stress to supply chains,hampering production and adding price pressures.Domestically,a faster recovery of consumption,higher

27、-than-expected wage growth and a lower-than-anticipated fall in profit margins could hold back the disinflation process.On the downside,a more persistent transmission of the still tight monetary conditions could further delay the rebound in economic activity,pushing inflation lower.Climate risks and

28、 the increasing frequency of extreme weather events continue to pose threats.202320242025202320242025202320242025202320242025Euro area0.50.81.50.61.21.65.42.72.25.63.22.2EU0.50.91.70.61.31.76.33.02.56.53.52.4Table 1:Overview-the Winter 2024 interim ForecastReal GDP growthInflationinterim ForecastFor

29、ecastinterim ForecastForecastWinter 2024Autumn 2023Winter 2024Autumn 20231.EURO AREA AND EU OUTLOOK Winter 2024(Interim)Forecast 2 1.1.SETTING THE SCENE The broad stagnation of the EU economy throughout 2023 carried over into weak momentum entering the new year.The EU economy narrowly escaped a tech

30、nical recession(two consecutive quarters of contracting GDP)in the second half of 2023,and at the end of the year real GDP was broadly at the same level as in the third quarter of 2022.Consumption and investment barely moved,underperforming expectations,while the weak positive contribution to growth

31、 of external demand was driven by imports falling more than exports.The drawdown of inventories also weighed on growth,potentially reflecting a still on-going post-pandemic rebalancing of supply and demand.The EU economy thus entered 2024 on a weaker footing than previously expected,and the latest h

32、igh frequency indicators do not suggest an imminent rebound.The contraction in manufacturing activity appears to have bottomed out and recent confidence readings are on an upward trend but remain below their long-term averages.The disappointing growth performance in 2023 must be assessed against the

33、 background of high,albeit declining,inflation and tightening monetary policy.In the fourth quarter of 2022,inflation in the EU peaked at 11%,with inflation in the euro area a notch below.One year later,between October and December 2023,EU inflation averaged 3.4%.The remarkable drop in inflation was

34、 largely driven by falling energy inflation(fuel,gas and electricity),as the EU successfully weaned itself off its dependency on Russian gas.Starting last summer,the slowdown of inflation in food(see Box 1.4),non-energy goods and services was also remarkable.Especially for the last two categories,it

35、 owes much to the vigorous tightening of monetary conditions:in the 15 months between July 2022 and September 2023,the ECB raised policy rates by a cumulative 450 basis points.This was the fastest tightening cycle in the history of the euro area.The tightening was even more forceful in some non-euro

36、 area Member States.Notwithstanding the rapid fall of inflation,price growth outstripped nominal wage growth for several quarters,eroding households purchasing power and wealth(see Box 1.3)and weighing on consumption growth.Though the corporate sector has weathered the successive shocks of the pande

37、mic,surging energy prices and rising labour costs(see Box 1.2),tighter credit conditions have put a lid on investment growth especially in construction.On the positive side,the labour market showed resilience,dispelling fears that policy action to tame inflation would come at the cost of employment

38、losses.Though global growth outside the EU held up relatively well,trade developments were disappointing last year.Economic activity outside the EU continued to grow steadily in 2023,but trade growth was anaemic.While services trade expanded further,global merchandise trade is estimated to have cont

39、racted,weighing heavily on the open EU economy.This weakness in merchandise trade in 2023 reflected a combination of the post-pandemic pullback in demand for consumer goods,tight financing conditions that held back demand for investment goods and increasing trade fragmentation in a context of height

40、ened geopolitical tensions.Beyond the short-term weakness,the macroeconomic environment is set to become more supportive of growth.Energy prices continue to benefit from ample inventories and strong supply and have so far reacted only marginally to the threat of supply disruptions posed by the confl

41、ict in the Middle East.Except for a short-lived uptick in January this year,wholesale prices of oil and gas have continued to fall and are now well below the assumptions underpinning the Autumn 2023 Forecast(AF23),heralding further contraction in retail energy prices in most EU countries,and support

42、ing a further recovery in the EUs external competitiveness,battered by the energy crisis in 2022.Although credit conditions are set to remain tight,falling inflation has fuelled market expectations of an imminent turnaround in the monetary stance.As a result,financial conditions are now somewhat loo

43、ser than in autumn.With little evidence that the labour market performance has reached a turning point and in a context of decelerating inflation,real wage increases continue to presage a rebound in consumption.Demand from EU trading partners is also set to pick up vigorously this year.Winter 2024(I

44、nterim)Forecast 3 Further escalation of geopolitical tensions warrants particular attention as the EU is less insulated from global developments than other large economies.This forecast assumes that geopolitical tensions will remain elevated throughout the forecast horizon.Though sanctions against R

45、ussia are expected to remain in place,the conditions for a gradual increase in reconstruction efforts in Ukraine are assumed to already be met as from end-2024/early 2025.This forecast likewise assumes that tensions in the Middle East will persist.The increase in shipping costs in the wake of the Re

46、d Sea trade disruptions is estimated to have a marginal impact on inflation.As firms adjust in response to delivery delays,they are assumed to avoid the supply bottlenecks that choked production and pushed up prices during the post-pandemic rebound(see Box 1.1).1.2.THE GLOBAL ECONOMY:RECENT DEVELOPM

47、ENTS AND OUTLOOK Global growth(excluding the EU)held up well throughout the first three quarters of 2023 After growing by 1%in the first quarter and 0.7%in the second,real GDP is estimated to have expanded by 0.9%q-o-q in the third quarter of 2023.The acceleration in 2023-Q3 was driven by stronger d

48、ata for China and the US,while economic activity in other advanced economies(e.g.UK,Canada,Japan)slowed down.As a result,growth for advanced economies on aggregate decelerated slightly in 2023-Q3,to just above 0.4%q-o-q.Growth in emerging markets outside of China edged up to 1.1%(from 1%in 2023-Q2).

49、and continued to expand in the fourth quarter.GDP data for 2023-Q4 came in broadly as expected in China and better than anticipated in the US.While fourth quarter GDP data for other economies is not yet available,the global composite PMI,at 50.5,points to continuing growth in 2023-Q4.The global serv

50、ices PMI weakened in 2023-Q4 but is still pointing to expansion.Yet,the global PMI for manufacturing remained in contractionary territory in 2023-Q4,at 48.9 and a little weaker than reported for 2023-Q3.The PMIs for manufacturing in advanced economies were particularly subdued(at 47.4).For both serv

51、ices and manufacturing the readings for emerging markets were somewhat stronger than for advanced economies.Weakness in global manufacturing is reflected in the sharp drop in global goods trade in 2023,while services,particularly travel and tourism,continued to recover.Growth in goods trade(excludin

52、g the EU)is estimated to have contracted in 2023 under the impact of the post-pandemic pullback in demand for manufactured goods,the weakness of the manufacturing sector and high inventories in the advanced economies,and fragmentation of trade due to geopolitical tensions.However,momentum for mercha

53、ndise trade(measured on a 3m-on-3m basis)picked up slightly towards the end of the year.In contrast,global trade in services outpaced GDP growth in 2023,with a continued rebound in global travel and tourism,which recovered to around 90%of pre-pandemic levels.Developments in the Red Sea are disruptin

54、g trade routes for goods.The re-routing of vessels via the Cape of Good Hope in South Africa resulted in the sharp fall of cargoes passing through the Red Sea.This is pushing up shipping rates and may act as a drag on global trade.See Box 1.1 for an assessment of these developments and their potenti

55、al impacts.Growth in the US has proved stronger than expected for 2023 on the back of robust private consumption,but is projected to moderate in 2024.The US economy accelerated in 2023-Q3 and remained strong in 2023-Q4 and growth for the year reached 2.5%,compared to 1.9%in 2022.Private consumption

56、was the main growth driver,but other components of domestic demand including government consumption and investment also contributed.While core services inflation(i.e.services excluding housing)has proved persistent to date,decreasing housing(shelter)and energy price inflation is expected to support

57、20253035404550556065Jan-20Jan-21Jan-22Jan-23Graph 1.1:Global PMIsManufacturing-AdvancedServices-AdvancedManufacturing-EmergingServices-EmergingSource:S&P Global.Index 50=expansionWinter 2024(Interim)Forecast 4 the disinflation process in 2024.Since December,the US Federal Reserve has been signalling

58、 the end of policy rate increases and the intention to start cutting in the course of 2024.This prompted the benchmark US 10-year treasury yield to drop from close to 5%at the end of October 2023 to around 4%at the end of January 2024.In 2024,private consumption and investment growth are forecast to

59、 moderate due to a gradually cooling labour market,still-tight credit conditions,and the fiscal stance becoming less supportive.Because of a high carry-over effect for 2024,and in light of strong high-frequency indicators so far this year,US growth is now expected to reach 2.1%in 2024,higher than pr

60、ojected in the Autumn Forecast,and to expand at close to the potential growth rate of around 1.8%in 2025.For the other advanced economies,growth is forecast to soften a little in 2024 and pick up again in 2025,though prospects vary by country.The Japanese economy has slowed down markedly in recent m

61、onths,and growth in 2024 and 2025 is expected to be somewhat lower than in 2023,with softer private consumption,trade and investment.In 2024,the UK is projected to grow at a similarly slow pace as in 2023 as tight fiscal and monetary policy largely offset the boost from lower energy prices,before se

62、eing some recovery in 2025.Developments elsewhere are mixed,with some economies expected to see slightly faster growth in 2024(e.g.Taiwan,Singapore,Korea,Switzerland),while others are set to see a mild slowdown(e.g.Norway,Australia).Burdened by the ongoing property sector downturn and adverse struct

63、ural factors,Chinas economy is expected to slow down over the forecast horizon.Domestic demand in China remains weak as the real estate crisis continues to weigh on household and corporate spending.High debt levels are weighing on state-owned enterprises,while also limiting the capacity for counter-

64、cyclical intervention by local governments.Consumer price inflation has been negative in China since October 2023 and export prices have also fallen sharply,contributing to global disinflationary pressures.Growth in China is expected to moderate to 4.6%in 2024(unchanged from the Autumn Forecast)and

65、further to 4.4%in 2025(-0.2 pared to autumn).Emerging Market Economies(EMEs)excluding China have shown surprising resilience despite global headwinds,with growth expected to edge up in 2024,and further in 2025.These economies have recorded relatively steady growth(1%q-o-q on average)over the past 4-

66、5 quarters,despite the drag from tighter monetary policy and generalised weakness in manufacturing and global goods trade.The moderation in energy and food prices in 2023 and supportive fiscal policy helped support growth.Policy rates are considered to have peaked and bond yields have fallen back in

67、 recent months as inflation has continued to edge down.The outlook for 2024 is for slightly stronger growth in MENA countries and Sub-Saharan Africa,while in Latin America slower growth is projected for Brazil and Mexico,and a contraction in Argentina.Overall,global growth(excluding the EU)is expect

68、ed to weaken from 3.5%in 2023 to 3.3%in 2024 and to return to 3.5%in 2025.For 2024,this is slightly stronger than in the Autumn Forecast(+0.1 pps.),driven largely by higher projected growth in the US,and unchanged for 2025(see Table 1.1).Growth in advanced economies excluding the EU is expected to f

69、all from 2.2%in 2023 to 1.9%in 2024,before edging back up to 2%in 2025.Growth in emerging economies(including China)is forecast to be 4.2%in 2023,4.1%in 2024 and 4.2%in 2025.Global trade growth(excluding the EU)is expected to rebound in 2024 and 2025 after the low growth rates seen in 2023.Global go

70、ods trade started to show some signs of improvement at the end of 2023 and growth is set to gain traction this year,partly due to favourable base effects.The post-pandemic rotation of demand from goods to services has largely come to an end,while the manufacturing sector and demand for investment go

71、ods are expected to gain strength in 2024 and 2025 as headwinds from monetary tightening are set to ease gradually.There is also increasing evidence of a turn in the Information and communication technologies(ICT)cycle that would support exports of manufactures in electronics,particularly in Asia.Se

72、rvices trade is also set to continue its recovery.International travel remains below pre-pandemic levels,despite the improvement in 2023,with the shortfall concentrated in China and other Asian economies.Overall,these developments support the projected pick-up in trade elasticities with respect to G

73、DP to around 1 in both 2024 and 2025.Winter 2024(Interim)Forecast 5 Concerns about persistently high global inflation appear to be dissipating.Both headline and core inflation rates have continued to fall in advanced and emerging economies(see Graph 1.2),though they remain above central bank targets

74、 in most cases.The further decline in oil prices in recent months and the marked weakness in Chinese export prices(see Graph 1.3)are expected to add downward pressure on headline rates.Higher shipping costs due to trade disruptions in the Red Sea are set to have a marginal impact on global inflation

75、,but potential supply chain disruptions constitute upside risks.Global financial conditions have eased in late 2023,with a marked drop in bond yields across both advanced and emerging economies.The prospect of faster cuts in policy rates in the US and the subsequent fall in US bond yields spilled ov

76、er favourably to global financial markets.The US dollar weakened broadly and long-term government bond yields fell,before recovering partially in January.Ten-year bond yields are down in many advanced and emerging economies over the past 2-3 months(e.g.UK,Canada,Brazil,India,South Africa,see Graph 1

77、.4).In parallel,portfolio flows to emerging markets rose towards the end of 2023,after a dip during the summer months.(Annual percentage change)202020212022202320242025202320242025World(excl.EU)-2.56.33.33.53.33.53.53.23.5World(excl.EU)exports of goods and services-7.010.73.21.13.43.71.73.33.6World(

78、excl.EU)imports of goods and services-8.411.54.30.23.53.71.23.43.7Table 1.1:International environmentTrade volumesAutumn 2023ForecastReal GDP growthWinter 2024interim Forecast -10123456789Jan-20Jan-21Jan-22Jan-23Graph 1.2:Global inflationCPI,advanced excl.USCore CPI,advanced excl.USCPI,USCore CPI,US

79、CPI,emergingCore CPI,emergingSource:Dallas Fed.%7085100115130145160175Jan-19Jan-20Jan-21Jan-22Jan-23Graph 1.3:Export prices in international comparisonUnited StatesJapanChinaEastern Europe/Central AsiaLatin AmericaAfrica and Middle EastSource:CPB.Price index in USD,Jan 2019=1000.50.60.70.80.91.02.02

80、.53.03.54.04.55.0Sep-23Oct-23Nov-23Dec-23Jan-24Graph 1.4:10-year bond yields in international comparisonUnited StatesUnited KingdomKoreaChinaJapan(rhs)Sources:National central banks%Winter 2024(Interim)Forecast 6 Commodity markets have thus far shown little reaction to the mounting regional tensions

81、 in the Middle East.Crude oil prices have fallen since autumn,and futures prices indicate a further gradual decline in 2024 and 2025.Spot crude prices are now around USD 10/bbl lower than assumed in the Autumn Forecast,and futures prices at end-2025 are projected around USD 6/bbl lower(see Graph 1.5

82、).The expected slowing of growth in the US and China is weighing on demand,while on the supply side,non-OPEC countries are offsetting attempts by the cartel to tighten the market.It is notable that OPECs share of global oil output is now only 26.5%(as of December 2023),down from 33.5%a decade earlie

83、r,in 2013.Furthermore,internal discord has kept the cartel from finding a unified line on cutting supplies,possibly exemplified by Angola leaving the cartel at end-2023.European gas and electricity prices fell strongly relative to autumn and are expected to remain broadly stable at current levels.Sp

84、ot prices in 2023-Q4 turned out lower than previously expected(by 15%for both TTF gas and electricity,see Graph 1.6 and 1.7).TTF gas prices were just below EUR 30/MWh at the cut-off date and the futures curve remains flat around this benchmark until 2025-Q4,which would suggest a reduction of 46%in 2

85、024 and 32%in 2025,compared to the expectations back in autumn.Mirroring gas prices,electricity prices are expected to be 30-40%cheaper over the forecast horizon.This decline reflects a combination of improved supplies and infrastructure(in gas as well as renewables,hydro and nuclear),very high gas

86、inventory levels and subdued demand.Efforts to reduce natural gas demand resulted in the EU consuming 17%less in December 2023(-19%for the January-November period)compared to the average for the month in the previous five years,partially achieved by a strong increase in new installed capacity in ren

87、ewables in the power sector.The EUs exposure to energy price volatility has thus been contained,but the threat of disruption of LNG deliveries due to the conflict in the Middle East is a new risk.Food and metal prices are also well below previous peaks and are expected to edge down further.Food pric

88、es have slightly increased since autumn,but they are well below their peak in 2022,and futures prices continue to project a gradual decline over the forecast horizon.This comes on the back of an uptick in production of key markets for staple foods and reduced concerns over supply.Metal prices have a

89、lso fallen and are expected to continue declining over the forecast horizon.The drop in prices is linked to weak economic activity in major advanced economies and weakness in Chinas commodity-intensive construction sector,as well as to ongoing supply recoveries for some base metals.60708090100110120

90、130Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25Graph 1.5:Brent oil historical and futures pricesFutures(10-day mov avg)At the time of AF23At the time of SiF23Spot price$/bblSources:ICE,Commodity Research Bureau.0306090120150180210240270Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-

91、24 Jan-25 Jul-25Graph 1.6:Natural gas historical and futures pricesFutures(10-day mov avg)At the time of AF 23At the time of SiF 23Spot price/MWhSource:ICE.050100150200250300350400450Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25Graph 1.7:Electricity historical and futures pricesFutu

92、res(10-day mov avg)At the time of AF23At the time of SiF23Spot price/MWhSource:ICE.Winter 2024(Interim)Forecast 7 (Continued on the next page)Box 1.1:Impact of the Red Sea crisis on the EU economic outlookThe Houthi rebels attacks in the Red Sea are disrupting one of the major shipping routes for th

93、e global economy,affecting delivery times,shipping costs and supply chains.Approximately 12%of global trade volumes go through the Red Sea and the Suez Canal.This includes inter alia 30%of all container shipping,12%of seaborne oil,8%of seaborne liquid natural gas(LNG)and 8%of world grain trade.In 20

94、22,around 23%of all EU goods imports came by ship from Asia,most of them travelling through the Red Sea.Disruptions in this key trading route may therefore have a significant impact on the EU economy.This box reviews the available evidence and concludes that bar a significant escalation companies sh

95、ould be able to avoid widespread production bottlenecks.Still,higher transport costs will inevitably be passed on to consumers,but the direct impact on inflation is set to be relatively small.Shipping through the Red Sea has been re-routed,resulting in longer shipping times and skyrocketing shipping

96、 costs.Between the start of the attacks(19 October 2023)and end-January,the 7-day moving average transit trade volumes through the Red Sea fell by 70%,while trade volumes through the Cape of Good Hope increased by 30%(Graph 1).Shipping times between Asia and Europe increased by 10-15 days and freigh

97、t costs for containers on several China to Europe routes increased by around 400%.The disruption is affecting shipping costs worldwide.Since the Autumn Forecast,the Freightos Global Container Freight Index a weighted index of spot shipping freight costs along major routes increased by 210%(Graph 2).

98、(1)The impact on commodity markets has so far been limited.The increase in non-OPEC oil supply and high stockpiles in the US in a context of weak demand continue to prevail over trade disruptions.The same applies to gas,where high gas inventories and overall reduced demand in the EU continue to push

99、 the wholesale price of European gas(TTF)downward,despite the Red Sea representing an important artery for LNG shipments.Food and metal prices have also continued to moderate on the back of abating supply concerns and/or weak demand.Firms in the EU are expected to manage the extension of delivery ti

100、mes without disruptions to output.According to the PMI survey,suppliers delivery times in the US and in the euro area have increased for the first time since the winter of 2022(Graph 3).Input prices,however,were broadly unaffected,while inventories of purchased goods remained at relatively high leve

101、ls.According to the EU Business and Consumer Survey,in January industry managers reported that the role of shortages of material as a factor limiting production was either broadly unchanged(construction)or continued to decrease(industry),converging further towards the pre-pandemic long-term average.

102、Capacity utilisation is also currently low(Graph 4).The Federal Reserve Bank of New York Global Supply Chain Pressures Index remained flat in January,after increasing in the prior months,and stood at about its long-term average.Available data suggest that neither global nor EU supply chains are curr

103、ently under strain.(1)According to Freightos,the cost of freight from China to the US East Coast and West Coast increased by 180%and 160%,respectively.12345678Jan-23Apr-23Jul-23Oct-23Jan-24Graph 1:Transit trade volume via Red Sea route and Cape of Good Hope routeRed Sea routeCape of Good HopeSource:

104、IMF Port Watch.Millions tons per day,7-day moving average0200040006000800010000120001400016000Jan-19Jan-20Jan-21Jan-22Jan-23Jan-24Graph 2:Freightos shipping costsGlobalChina-MediterraneanChina-EuropeSource:Freightos.USD per 40-ftcontainerWinter 2024(Interim)Forecast 8 Box(continued)The freight marke

105、t is also now significantly different than during the post-pandemic rebound and disruptions are set to be re-absorbed.The strong pullback of global demand for goods and tighter financial conditions have weighed heavily on global trade and the demand-supply imbalance that characterised the post-pande

106、mic expansion has by now been reversed.Considering the glut in container and vessel capacity after the pandemic adjustment,shipping firms should progressively be able to absorb the shock of longer delivery routes.Firms may also use alternative vectors.In terms of price pressures,freight and insuranc

107、e costs are typically low for most product categories,while land or air transport are often an alternative should shipping costs inflate excessively(2).The current surge in shipping costs is therefore set to be re-absorbed.As the supply overhang in vessels and containers prevails over the surge in d

108、elivery time,shipping prices are expected to fall back on their declining trend.Still,higher shipping costs are set to exert a limited upward pressure on inflation.Private sector analysts expect upward pressure on EU inflation to be in the range of 0.2-0.3 pps.(3).This range appears broadly plausibl

109、e,considering recent estimates of pass-through of freight costs to headline inflation,the origin of EU imports and alternative scenarios of progressive normalisation in shipping costs as overcapacity in containers and vessels absorbs extended time at sea.The pass-through should be more visible in th

110、e second quarter of this year,after annual shipping contracts are agreed.The impact may be higher on those inflation categories which have higher import intensities,mainly industrial goods and certain food categories(4).In addition,the impact on inflation may be higher if shipping costs were to rema

111、in permanently higher and global demand were to pick up more strongly than projected.Further escalation is a clear risk for the economic outlook,in particular if the conflict disrupts energy supplies,causing oil and gas prices to surge.(2)Maritime transport costs are typically higher(above 5%of Frei

112、ght On Board price)for low value to weight/volume products that are normally transported in bulk(e.g.crude oil,natural gas,grains)or require special conditions for transport(e.g.meat,vegetables and fruits,live cattle).Above a certain value to weight/volume,shippers switch to land or air transport.Se

113、e Ferrari,E.,P.Christidis and P.Bolsi.(2023).“The impact of rising maritime transport costs on international trade:Estimation using a multi-region general equilibrium model”.Transportation Research Interdisciplinary Perspectives Volume 22.(3)JPMorgan estimates a 0.27 pps.add to global core CPI in re

114、sponse to a roughly 150%sustained increase in container shipping costs.ABN Ambro finds that the rise in shipping tariffs may raise euro area goods inflation by 1 pp.and overall inflation by 0.3 pps.Goldman Sachs suggests that the increases since December could raise global core prices by 11 bps.,wit

115、h larger effects in the euro area(0.21 pps.)and smaller effects in the US(6 bps.).The OECD estimated that a 50%rise in shipping costs increases import price inflation by 2 pps.and consumer price inflation by about 0.2 pps.,after a year.Sources:JPMorgan(2024).Shipping disruptions reignite supply chai

116、n woes.Global Emerging Markets Research,January;ABN Amro(2024).Will the Red Sea disturbances throw disinflation off track?Global Monthly,January;Goldman Sachs(2024).Global Economics Comment:Higher Costs Due to Red Sea Shipping Disruptions Imply Modest Upside to Global Inflation.Economics Research,Ja

117、nuary;Organisation for Economic Cooperation and Development(OECD)(2021).“Rising container shipping costs could push up near-term inflation in OECD countries.”In OECD Economic Outlook,Vol 2021 Issue 1,No.109,pp.31-33,May.(4)ECB(2022).“A new indicator of domestic inflation for the euro area.”In ECB Ec

118、onomic Bulletin,Issue 4,Box 7.10203040506070Jan-21Aug-21Mar-22Oct-22May-23Dec-23Graph 3:Suppliers delivery time in the manufacturing sectorEuro areaUSIndex,1yHousehold loan growth(y-o-y%)Credit standards for consumer credit(rhs)%Balance Source:ECB.Winter 2024(Interim)Forecast 17 The drawdown of inve

119、ntories detracted from growth.The contribution of the change in inventories to growth has fluctuated strongly throughout 2023,but in year-on-year terms it detracted from growth throughout the first three quarters of 2023.This large change in inventories partly hides statistical discrepancies.These w

120、ere generally sizeable in the post-pandemic years but have been mostly reduced in successive data releases.Still,the gap between the demand and production side of GDP accounting may effectively reflect a continuing drawdown of inventories and a normalisation of the rate of their accumulation,e.g.,as

121、 energy and other supply disruptions have been resolved(see Graph 1.14).Industry and construction deepened their downturn,while contact-intensive services stagnated.Value added in industry has continued declining since the second half of 2022,in line with industrial production.As production in the e

122、nergy-intensive sectors stabilised at a low level,the decline over most of 2023 took place in the less energy-intensive sectors,notably investment goods(see Graph 1.16).The countries accounting for the bulk of the decline are Ireland(a statistical payback for the strong dynamics in 2022)and Germany,

123、due to a combination of structural(high energy costs impairing international competitiveness,the transformation of the automotive cluster)and cyclical factors(weak demand for investment goods).Construction activity continued to stagnate in view of higher material and financing costs weighing on dema

124、nd.Value added in the contact-intensive(consumer-related)services recovered to just above pre-pandemic levels,but further growth has been sluggish,possibly reflecting households restrained spending on non-essential services.In contrast,other market services(e.g.,communications,finance and business s

125、ervices)continued growing consistently(see Graph 1.15).Developments in agriculture and public services remained muted over most of 2023,with gross value added in agriculture stabilising at a level still below pre-pandemic values,reflecting also the various extreme weather events affecting Europe las

126、t year.Stagnation of growth in 2023-Q4 was largely driven by a contraction in Germany.For 2023-Q4,continued economic growth was reported in four(Italy:0.2%,Spain:0.6%,Belgium and Latvia:0.4%,)of the 12 Member States for which Eurostat published preliminary flash estimates.In four other Member States

127、,growth rebounded following previous declines(Czechia,Portugal)or moved out of recession(Sweden,Austria).Activity stagnated in France and contracted in Germany(-0.3%),Latvia and Ireland,the latter staying in recession.Growth estimates for the reporting countries ranged from-0.7%quarter-on-quarter(Ir

128、eland)to+0.8%(Portugal).758085909510010511011519-Q420-Q421-Q422-Q423-Q419-Q420-Q421-Q422-Q423-Q419-Q420-Q421-Q422-Q423-Q419-Q420-Q421-Q422-Q423-Q419-Q420-Q421-Q422-Q423-Q419-Q420-Q421-Q422-Q423-Q4Graph 1.15:Gross value added in the EU across sectorsAgriculture(1.6%)Industry(20.3%)Construction(4.8%)P

129、ublic services(17.9%)Contact-intensive services*(22%)Other mkt.services(33.6%)TOTAL 2023-Q3Note:*Wholesale and retail,transport,accommodation,food services;arts,entertrainment,recreation.%of GVA in latest four quarters in brackets.Index,2019-Q4=100 -1.5-1.0-0.50.00.51.01.52.02.53.015-Q117-Q119-Q121-

130、Q123-Q1Graph 1.14:Change in inventories,EU%GDPContribution to GDP growth,pps.y-o-yWinter 2024(Interim)Forecast 18 Latest high frequency data point to continued weakness in industry,construction and retail in late 2023.Data for production in industry and construction in October and November 2023 conf

131、irm the declining trend of the first three quarters of the year(see Graph 1.16).Data on retail trade and overnight stays in tourist accommodations do not suggest a major upswing in consumption spending in 2023-Q4.1.4.2.Labour market The EU labour market remained strong in the third quarter of 2023.R

132、ecent data suggest that the labour market remained resilient in the face of stagnating economic activity.According to national accounts,employment in the EU and the euro area continued to expand in 2023-Q3(by 0.2%q-o-q,up from 0.1%in Q2).In the same period,based on the Labour Force Survey,the EU emp

133、loyment rate of people aged 20-64 stood at 75.3%(74.8%in the euro area),close to the record high reached in the previous quarter.The unemployment rate was stable in December,standing at 5.9%in the EU and 6.4%in the euro area,back to the record lows achieved in May and June.The broader measure of lab

134、our market slack,which includes other groups with an unmet need for employment(i.e.part-time workers who want to work more,people who are available to work but do not look for work,and people who are looking for work but are not immediately available),stood at 11.3%of the extended labour force aged

135、20-64,a notch higher than the record low reached in Q2.Continued employment expansion was accompanied by stagnating hours worked and some signs of labour hoarding by EU firms.Despite the employment expansion,the total number of hours worked stagnated in the last two quarters of 2023,leading to a dec

136、rease in hours worked per employee in the EU.The reluctance of firms to reduce employment could be explained by the difficulties experienced by firms in hiring workers,especially for specific skills and as a relatively large cohort is retiring,the need to train workers and the expectation that deman

137、d will rebound in the future.The Commissions new survey-based labour hoarding indicator(4)-which measures the percentage of managers expecting their firms output to decrease,but employment to remain stable or increase-supports this view:following the peak reached during the COVID-19 crisis,the perce

138、ntage of EU firms hoarding labour remains above pre-COVID levels,though in January 2024 it was slightly lower than a year earlier.Among the largest EU economies,labour hoarding in Germany,France and the Netherlands is still higher than a year ago.The gap between labour demand and supply is narrowing

139、(see Graph 1.17).Firms are advertising slightly fewer vacancies:in the EU,the job vacancy rate edged down to 2.6%in 2023-Q3(from 2.7%in the previous quarter).This is still historically high,although down from levels seen at the end of 2021.In January 2024,the prominence of labour as a factor limitin

140、g production as reported by business managers in the (4)For further details,please see European Commission(2023).European Business Cycle Indicators,2nd quarter 2023:A new survey-based labour hoarding indicator.European Economy Technical Paper 066,July.889398103108113Jan-21Jul-21Jan-22Jul-22Jan-23Jul

141、-23Graph 1.16:Short-term indicators,EUProduction in constructionRetail tradeIndustrial productionManufacturing-energy intensiveManufacturing-non-energy intensiveIndex,Jan 2021=100Note:Energy intensive sectors defined as having energy intensity above the average in manufacturing(NACE 16,17,19,20,22-2

142、4).-4-3-2-1012314-Q115-Q317-Q118-Q320-Q121-Q323-Q1Graph 1.17:Measures of labour market tightness,EUJob vacancy rateEmployment Expectations IndicatorLabour market slack,inverted(20-64 years)Industry-Labour as factor limiting production*Services-Labour as factor limiting production*Note:Z-scores are u

143、sed as measures and computed by subtracting the mean from a data value and then dividing by the standard deviation.Mean and standard deviation are calculated from 2000,except for the job vacancy rate and labour market slack.*Share of managers indicating shortage of labour force as factor limiting pr

144、oduction.Labour market looseningz-scoreWinter 2024(Interim)Forecast 19 Commissions surveys was lower than the high of 2022-Q2 in industry and 2023-Q3 in services,albeit still well above its long-term average.The decline seems to have come to a halt in industry,but not in services.Survey data up to J

145、anuary also confirm that the outlook for employment is dimming,while also remaining marginally above its long-term trend.All in all,the labour market appears still tight by historical standards,but less than it was from late 2021 to early 2023.So far,there is little evidence that the labour market h

146、as reached a turning point whereby falling demand would translate into a material contraction of employment and an increase in the unemployment rate.The labour market looks therefore set to withstand the current weakness in economic activity.Employment growth is however expected to be subdued in the

147、 upcoming upswing,given evidence of labour hoarding.Wage growth remained robust but started decelerating.Based on quarterly national accounts data,growth of nominal compensation per employee continued to be strong in 2023-Q3(5.7%and 5.2%from the same quarter in the previous year,in the EU and euro a

148、rea respectively),mainly due to a strong increase in industry.However,this was a slight slowdown compared to the previous quarter for both aggregates,with the deceleration being broad-based among sectors across EU Member States.Graph 1.18 shows a diffusion index(5)capturing the breadth of the decele

149、ration of wage growth in the economic activities of the EU(based on data for wages and employment by Member State and NACE classification of economic activities).Wages were accelerating for two consecutive quarters for around 20%of the EU workforce.This percentage is well below the share in 2023-Q1(

150、40%),and the peak reached in 2020-Q4.Wage growth is expected to persist over the coming quarters,in response to workers demand to recoup lost purchasing power in the previous years.This expectation is corroborated by the increase in wages agreed for incumbent workers.The annual growth rate of negoti

151、ated wages in the euro area accelerated in the third quarter of 2023 to 4.7%y-o-y(up from 4.4%in the previous quarter),the highest reading in the series.However,the indicator of nominal wage growth in job postings(i.e.for newly hired workers)showed a deceleration in 2023-Q4 in the euro area.This is

152、valid for a number of euro area Member States,such as Germany,France and Spain,while the opposite happened in the Netherlands.Going forward,wage growth is expected to allow past losses in workers real incomes to be recouped without fuelling inflation.Falling growth in profit margins(see Graph 1.19)s

153、uggests that firms were absorbing increased labour costs rather than passing them on to consumers with higher prices.Also,as economic growth gains pace,labour productivity is set to grow and to accommodate a higher wage growth than inflation in 2024 and 2025.Further,labour productivity gains,as well

154、 as a decline in corporate profit margins,are set to allow inflation to return back towards the target.(5)The diffusion index measures the percentage of sectors in the economic activities across the 27 EU Member States showing an acceleration in the y-o-y growth rate of nominal compensation per empl

155、oyee,weighted for the compensation of employee by sector and by country,for two quarters in a row.It is expressed as a 3-terms moving average.01020304050607080-6-4-2024681011-Q313-Q315-Q317-Q319-Q321-Q323-Q3Graph 1.18:Wage growth and its diffusion by economic activity in EU Member StatesWage growthD

156、iffusion index(rhs)Note:Wage growth is the y-o-y nominal compensation per employee ofthe EU for the total economy.The diffusion index is expressed as a percentage of the economic activities(NACE Rev.2)in the EU Member States economies showing an acceleration in the wage growth for two quarters in a

157、row.It is weighted by the compensation of employee by activity and by country.The index is expressed as a 3-terms moving average.%y-o-y%-6-4-202468102019-Q12020-Q12021-Q12022-Q12023-Q1Graph 1.19:Profit margin and unit labour costs,EUProfit marginUnit labour costsy-o-y%Note:Profit margin is the annua

158、l change of the ratio of gross operating surplus to real GVA and unit labour cost is the annual change of the ratio of compensation of employees to real GVA.Winter 2024(Interim)Forecast 20 1.4.3.Inflation In the fourth quarter of 2023,lower energy commodity prices and weaker economic momentum eased

159、price pressures more than expected.Headline inflation in the fourth quarter averaged 2.9%y-o-y in the euro area,some 0.7 pps.below the Autumn Forecast projection.Energy accounted for most of the downside surprise as sharply lower energy commodity prices pushed consumer energy deflation deeper than f

160、orecast in October.Moreover,weaker-than-expected economic momentum eased price pressures in services and non-energy industrial goods.On the contrary,inflation of unprocessed food posted robust monthly price gains,surprising on the upside in the fourth quarter.Looking through short-term volatility,pr

161、ice pressures continued to moderate in recent months.HICP inflation in the euro area fell sharply in October,to 2.9%,and further down to 2.4%in November(the lowest since mid-2021).It rebounded to 2.9%in December and edged back down to 2.8%(6)in January(see Graph 1.20).This pattern reflected the inte

162、rplay between weakening inflationary pressures and volatile base effects,largely linked to the previous years developments in energy prices.Base effects evolved from strongly negative in October,through neutral in November to strongly positive in December,when they were solely responsible for the up

163、tick in the headline annual rate.They turned mildly negative again in January.In the last four months,inflation fell sharply in processed food and industrial goods but increased in unprocessed foods and energy.Annual deflation of consumer energy prices narrowed from-11.2%in October to-6.3%in January

164、,as positive base effects and expiring energy measures outweighed the effect of lower energy commodity prices.Still,cheaper crude oil and natural gas pushed down consumer prices of fuel (6)Eurostat flash estimate.02468101214161820Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.21a:Inflationary pressures

165、-processed food,euro areay-o-y3m-o-3m*m-o-m*Note:*seasonally and working-day adjusted,annualised%-20-1001020304050-10-50510152025Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.21d:Inflationary pressures-unprocessed food,euro areay-o-y3m-o-3m*m-o-m*,rhsNote:*seasonally and working-day adjusted,annualise

166、d%-2024681012Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.21b:Inflationary pressures-non-energy industrial goods,euro areay-o-y3m-o-3m*m-o-m*Note:*seasonally and working-day adjusted,annualised%-2024681012Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.21c:Inflationary pressures-services,euro areay-o-y3m

167、-o-3m*m-o-m*Note:*seasonally and working-day adjusted,annualised%-200-1000100200300400-40-30-20-1001020304050607080Jul-21Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.21e:Inflationary pressures-energy,euro areay-o-y3m-o-3m*m-o-m*,rhsNote:*seasonally and working-day adjusted,annualised%-2024681012Jan-16Jan-1

168、8Jan-20Jan-22Jan-24Graph 1.20:Inflation breakdown,euro areaEnergyUnprocessed foodNon-energy industrial goodsProcessed food incl alcohol&tobaccoServicesHICP,y-o-y%changey-o-y%changeWinter 2024(Interim)Forecast 21 for transport,gas and electricity in the fourth quarter.January 2024 saw an uptick in en

169、ergy prices,likely reflecting rising Brent oil prices as well as the impulse from expiring gas and electricity policy measures.For all other HICP components,annual inflation moderated further in the four months to January,with the exception of unprocessed food(see Graphs 1.21a to e).The latter picke

170、d up visibly in November and continued to increase in December and January(to 7%y-o-y,up by 2.5 pps.from October),as robust monthly price gains of fresh vegetables and,to a lesser extent,fruit were magnified by positive base effects.Inflation of processed food,however,continued on a downward trend,f

171、alling by nearly 4 pps.in the last 4 months,to 5.3%y-o-y in January,amid a gradually moderating price momentum(7).Likewise,non-energy industrial goods saw annual inflation moderate further,to 2%y-o-y in January(1.5 pps.down from October),as the price momentum fell to nearly zero in December and Janu

172、ary.Annual inflation of services dropped sharply from 4.6%in October to 4.0%in November to remain unchanged at this level through January.While disinflation has stalled on a year-on-year basis since December,monthly price pressures in services remained weak throughout the fourth quarter,with price m

173、omentum easing to levels last seen in mid-2021.Underlying inflationary pressures continued to weaken.Despite volatility in inflation of major components,underlying price pressures remained firmly on a disinflationary path.Permanent-exclusion-based measures of underlying price pressures,as well as a

174、range of alternative statistical indicators(trimmed means,weighted medians),continued to decelerate,reaching their lowest levels in roughly two years(see Graph 1.22).Moreover,the 3m-o-3m price momentum,better reflecting recent price pressures,confirms their continued moderation since autumn.Finally,

175、the share of HICP items,seasonally adjusted,showing positive month-on-month change on average in the last three months declined further in the fourth quarter,to a 2.5-year low.This suggests that,in addition to weakening,inflationary pressures continue to narrow.Non-energy goods and services have tak

176、en over from energy as the key disinflation factors since the summer of 2023.Annual headline inflation fell by almost 8 pps.between October 2022(when it peaked at 10.6%)and January 2024,with energy accounting for more than 5 pps.,or two-thirds,of this decline(see Graph 1.23).Processed foods and non-

177、energy industrial goods each subtracted a little over 1 pp.,while unprocessed food detracted another 0.5 pps.Given the delayed peak of services inflation,its contribution to overall disinflation in this period was negligible.The disinflation pattern has changed significantly since July 2023,which ma

178、rked the peak of services inflation and near-trough of energy inflation.The 2.5 pps.decline in headline inflation between July 2023 and January 2024 was driven by components with higher demand elasticity,and thus more sensitive to the impact of monetary tightening,i.e.non-energy industrial goods,pro

179、cessed foods and services.Energy has lost its disinflationary impetus since the summer,as its contributions to headline inflation,while still strongly negative,have not changed between July 2023 and January 2024.(7)The momentum of prices refers to 3m-o-3m percentage growth in seasonally adjusted pri

180、ces,annualised.3050709023456789Jan-22Jul-22Jan-23Jul-23Jan-24Graph 1.22:Measures of underlying price pressures,euro areaPercent of 5-digit items with positive inflation*(rhs)HICP excl.food and energyHICP excl.energy and unprocessed foodsWeighted medianECB Trimmed mean 20%Note:*Percent of 286 COICOP

181、items(5-digit level)that registered positive monthly growth,on average in the last three months(seasonally adjusted).y-o-y%change%-10-8-6-4-202Oct22-Jan24Oct22-Jul23Jul23-Jan24Graph 1.23:Contributions to the decline in annual headline inflation in the euro areaServicesEnergyNon-energy industrial goo

182、dsUnprocessed foodProcessed food incl.alcohol and tobaccoNote:Contributions calculated as changes in the contrbution to euro area annual headline inflation between the two given months.-7.9pps -5.3 pps-2.5 ppspps.Winter 2024(Interim)Forecast 22 (Continued on the next page)Box 1.4:Food inflation in t

183、he euro area what were the driving forces behind the extraordinary surge in 2022-2023?Food inflation accelerated to unprecedented levels in the euro area in 2022-23,peaking at 15.5%in March 2023.Following energy,the contribution of food inflation to headline inflation was the second highest in this

184、period,reaching 3.1 pps.in February-March 2023.This has raised concerns as food is an important item of households consumption baskets,most notably for low-income households.Since March 2023,food inflation has been falling rapidly,though it is still high on year-on-year terms(6.1%in December 2023).T

185、he surge in food inflation was broad-based across food items,both processed and unprocessed.In terms of year-on-year inflation rates,only tobacco,alcoholic beverages and fruits stayed below headline inflation during the spike.However,it must be noted that tobacco and alcohol are subject to high leve

186、ls of excise taxation which dampens the effect of changes in input prices(1).Bread and cereals,meat,milk,cheese and eggs,and vegetables are the items that contributed most to the recent spike in food inflation(Graph 1).This is partly due to their relatively high shares in the overall consumption bas

187、ket.Various factors have driven the increase in food inflation,including global commodity price movements due to supply bottlenecks and the energy price shock,but also weather conditions.Input prices,such as those of energy and food commodities and of fertilisers,have been on the rise since early 20

188、21.Climate change and extreme weather events,in particular droughts and floods,have also affected agricultural production,contributing to the surge in food commodity prices.While commodity prices have shown a sizeable correction recently,they are still at elevated levels.Moreover,profit and wages in

189、 both the food manufacturing and distribution sectors have picked up in the last two years,further driving up consumer prices.The dispersion of food inflation among euro area countries has reached unprecedented levels,with some countries experiencing a cumulative food price increase of around 32-42%

190、in the past two years(Graph 2).In addition,countries with the highest food price shocks,such as the Baltics,Slovakia and Croatia,also tend to have the highest share of food in the overall consumption basket.This worsens the impact of the price shock on the cost of living of these countries.Several f

191、actors could explain why these five countries experienced higher food inflation.These include:i)a higher exposure to the energy price shock;ii)lower absolute price levels due to a lower share of non-commodity costs(such as wages),which imply a higher relative price increase in response to an externa

192、l commodity shock;iii)a past history of medium-to-high inflation,which could imply a higher sensitivity to external inflation shocks.In addition,the value-added deflator of the distribution sector which is an (1)Alcoholic beverages and tobacco are included in the special aggregate of food,alcohol an

193、d tobacco in the Eurostat classification,which is usually referred to as food inflation.-20246810121416Jan-19Jan-20Jan-21Jan-22Jan-23Graph 1:Euro area food inflation and its components contributionsBread and cerealsMeatFish and seafoodMilk,cheese and eggsOils and fatsFruitVegetablesSugar,jam,honey,c

194、onfectioneryMineral waters,soft drinks,juicesCoffee,tea and cocoaTobaccoAlcoholic beveragesFood products n.e.c.Total food inflation%,pps.-5051015202530Jan-19Jan-20Jan-21Jan-22Jan-23Graph 2:Cross-country dispersion of food inflation in the euro areaInter-quartile rangeRangeMedianEA weighted average%W

195、inter 2024(Interim)Forecast 23 Box(continued)important driver of food consumer prices increased much more strongly(up to 3.5 times faster)in these countries than the average of the euro area.The food manufacturing sector saw major input price increases led by agricultural produce,energy,distribution

196、 and packaging costs.This can be seen by combining an input-output table analysis with input price indices for the food manufacturing industry,which allows examining the drivers of the input price increases and the extent to which they explain the evolution of the output price of the sector(Graph 3)

197、.This shows that the food manufacturing sector saw its input costs increasing faster than its output prices up until the end of 2021,which implied a worsening of profit margins of food producers over that period.Profit margins started to recover as of the beginning of 2022 as input prices fell more

198、sharply than output prices.This indicates that current profits are probably compensating for losses in profitability sustained in the period 2020-2021.As these price pressures eased and some even turned negative in 2023,overall input prices also fell despite a moderate pickup in wages.Econometric an

199、alysis shows that food manufacturing PPI and the value-added deflator of the distribution sector(2)(decomposed into unit labour cost and unit gross operating surplus)are the most important drivers of consumer food inflation(measured by the HICP)in the euro area.Electricity and gas PPI also have a sm

200、all but significant impact,most likely through the energy use of the distribution sector.Agricultural products and food imports do not show significant coefficient estimates,indicating their lower importance in final consumer prices once the other factors in particular food PPI are controlled for.A

201、historical decomposition using the estimated coefficients(Graph 4)shows that the main driver of the pick-up in food HICP inflation in 2022 was the food manufacturing PPI.Due to the size of the energy price shock,there was also a substantial impact of electricity and gas inflation on food inflation t

202、hat year.The unit gross operating surplus of the distribution sector also contributed significantly to food inflation in 2022-23,while unit labour costs started to play an increasing role as of the end of 2022.As the past shocks were priced in and passed through the entire food value chain,food infl

203、ation started falling quickly in 2023.In the absence of renewed pressures on input prices and if wages and profits stay in line with price stability,disinflation should continue,and food inflation should return to historically observed low levels.However,climate change-induced weather volatility,a w

204、orsening of the geopolitical situation,potential disruptions in global commodity markets,or excessive growth in wages or profits could pose challenges to food inflation in the future.(2)The distribution sector is approximated with NACE sectors G-I,i.e.wholesale and retail trade,transport,accommodati

205、on and food services,for which data is available in the sectoral national accounts.This is wider than food distribution,so caution is necessary when interpreting the results.-4-20246820-Q121-Q122-Q123-Q1Graph 3:Changes in food PPI and input costs(including labour)of food manufacturing in the euro ar

206、eaAgricultureElectricity,gasPackaging-relatedWholesale,retailTransport,logisticsOtherWagesTotal input costsFood PPIq-o-q%change-2-1123420-Q121-Q122-Q123-Q1Graph 4:Drivers of food inflation in the euro areaPPI-food manufacturingPPI-electricity and gasUnit labour cost,distrib,Unit gross op.surplus,dis

207、trib.Food HICP lag 1ResidualIndirect taxesFood HICPq-o-q%change,pps.Notes:Quarter-on-quarter seasonally adjusted data,food HICP isnormalised with the estimated constant to zero.Winter 2024(Interim)Forecast 24 1.5.THE OUTLOOK 1.5.1.GDP Survey indicators give tentative signs of bottoming out,though fo

208、r some the upward trend stalled in January.On a quarterly-average basis,the European Commissions Economic Sentiment Indicator(ESI)largely moved sideways in the EU in the fourth quarter.The trough in confidence seems however behind us and in December the indicator was 2.5 points up compared to Septem

209、ber.Disaggregated indicators point to a broad-based improvement of confidence in services,construction and among consumers over the last quarter of 2023,whereas industrial confidence stayed broadly flat throughout the third and fourth quarters.The January results however indicate a pause in the upti

210、ck of overall sentiment or even a relapse in some of the component confidence indicators,notably in construction,retail and among consumers.For the euro area,the dynamics of the ESI were broadly in line with the evolution of the HCOB Eurozone Composite PMI Output Index(see Graph 1.25).The ESI remain

211、ed below its long-term average and the PMI was still shy of the critical 50-points threshold(thus in mildly contractionary territory).Weak demand has confirmed itself as the most prominent factor limiting production,while shortage of material and equipment is far less so than several quarters ago.Th

212、e severity of labour shortages is gradually easing but is still significant(see Graph 1.24).According to the quarterly manufacturing survey,capacity utilisation continued its broad downward trend observed since spring/summer 2021.On a positive note,the tracker of new orders posted a slight increase,

213、export expectations have stabilised,and the weakening of order inflows has stopped.-4-3-2-101234Jan-21Jan-22Jan-23Jan-24Jan-21Jan-22Jan-23Jan-24Jan-21Jan-22Jan-23Jan-24Jan-21Jan-22Jan-23Jan-24Graph 1.25:ESI/Confidence and PMI,euro areaPMIESI/ConfidenceCompositeIndustryServicesSource:S&P Global,Europ

214、ean Commission.Note:Standardised data based on 2000-07 sample.Construction 010203040506021-Q122-Q123-Q124-Q121-Q122-Q123-Q124-Q121-Q122-Q123-Q124-Q1Graph 1.24:Factors limiting production,EUInsufficient demandLabour shortagesMaterial/space/equipment shortagesFinancial constraintsOther factorsIndustry

215、ServicesConstructionWinter 2024(Interim)Forecast 25 The Commissions October-November business surveys continue to point to a positive outlook for investment in 2024.The net percentage of firms expecting an increase in their firms investment was significantly lower in 2023 than in 2022,and it is expe

216、cted to increase only slightly in 2024(see Graph 1.26).With real GDP in the EU barely growing since late 2022,investment reported in 2023 or planned for 2024 mainly serves replacement purposes.In industry,the share of investment related to extension of production capacity decreased in 2023 and is ex

217、pected to further drop in 2024.By contrast,the share of investment dedicated to streamlining production processes is planned to increase,suggesting ongoing technological adaptation.Demand and technical factors are reported as the main drivers of investment in 2023 and 2024.Even if still tight,financ

218、ing conditions seem now set to loosen somewhat more or earlier than assumed in autumn,while corporate balance sheets remain solid on aggregate,despite falling profit margins.Together with the further deployment of NextGenerationEU(NGEU),this is set to benefit investment.Consumption growth continues

219、to be held back by a high saving rate.The saving rate declined slightly in 2023-Q3 but remains above pre-pandemic average.Recent indications from the Commissions surveys show that an increasing share of consumers intend or expect to be in a position to save over the next 12 months,while assessing th

220、eir household financial situation to be slowly improving,following the hit from inflation(see Graph 1.27).This may be related to the fact that rising interest rates have increased the opportunity cost of consumption,or that households need to rebuild financial buffers,which have been eroded by infla

221、tion(see Box 1.3).Overall,a significant boost to consumption from a declining propensity to save is therefore unlikely.The international environment should support growth more than in the past year.The momentum of global economic growth is set to remain broadly intact.Global imports from outside the

222、 EU are expected to improve in 2024,as global trade volumes normalise,following sharp post-pandemic swings(see Table 1.1).This should create a supportive environment for export growth.Annual GDP growth in the EU is projected at 0.9%in 2024(0.8%in the euro area)and at 1.7%in 2025(1.6%in the euro area

223、).Overall,the EU economy entered the new year on a weaker footing than previously expected.Prospects for the first quarter of 2024 remain subdued,but the conditions for a progressive acceleration of economic activity this year appear still in place.Real wage growth and resilient employment should su

224、pport a rebound in consumption,though part of the gains in disposable income will go into savings.Despite falling profit margins,investment is set to benefit from a gradual easing of credit conditions and the further deployment of NGEU,as well as from the need for technological adaptation.Moreover,t

225、he EUs external demand is expected to normalise.In the second half of this year,the pace of growth is set to stabilise at cruising speed,broadly in line with potential,until the end of 2025.All Member States economies are set to return to growth in 2024.The growth forecast for most major EU economie

226、s has been revised down for 2024:Germany(-0.5 pps.),France(-0.3 pps.),Italy(-0.2 pps.),the Netherlands(-0.7 pps.),while remaining unchanged for Poland and Spain and revised up for Sweden(+0.4 pps.)in view of positive surprises in outturn data.Whereas economic activity is expected to have contracted

227、in -16-12-8-404812-40-30-20-100102030070911131517192123Graph 1.26:Investment plans by ripeness:EU ManufacturingAutumn(t-1)Spring(t)Autumn(t)GFCF,total economy,(rhs)%balancey-o-y%change-30-25-20-15-10-50-5051015202519-Q120-Q121-Q122-Q123-Q124-Q1Graph 1.27:Saving intentions and saving rate,EUSaving ra

228、te of householdsSaving intentions over next 12 monthsFinancial situation of householdConsumer confidence indicator(rhs)%,percentage balancepercentage balanceWinter 2024(Interim)Forecast 26 11 Member States in 2023,in 2024 all EU economies are projected to expand.Several smaller economies continue to

229、 see GDP in 2024 expanding in the 2-3%range.1.5.2.Inflation Lower energy commodity prices,weaker economic momentum and recent inflation outturns set inflation on a lower disinflationary path than anticipated in the Autumn Forecast.Annual headline inflation is projected to continue moderating over th

230、e forecast horizon,even if more month-to-month volatility around trend is to be expected in the near term.With both spot and future prices of energy commodities considerably below the autumn assumptions,consumer energy inflation is set to be lower,notwithstanding upward impulses due to the expiratio

231、n of policy measures in some Member States.Furthermore,weaker economic momentum and the ensuing lower-than-expected inflation of industrial goods and services in the final months of 2023 imply a lower carry-over to 2024,shifting the 2024 inflation outlook down compared to the Autumn Forecast.Easing

232、pipeline pressures and lower commodity input costs in the food and industrial goods industries should continue underpinning the deceleration in non-energy goods prices(see Box 1.4).Meanwhile,wage pressures,which are developing broadly in line with the autumn projections,are projected to moderate fur

233、ther over the forecast horizon from their peak in mid-2023(see Graph 1.18).The expected buffering of remaining wage pressures by the decline in firms profits should provide the necessary conditions for the further progressive moderation in inflationary pressures.Red Sea trade disruptions,however,are

234、 set to slow down the disinflationary process in the near term.The fallout from the widening of the tensions in the Middle East to the Red Sea represents a negative supply shock that has pushed European shipping costs higher and lengthened delivery times.This is expected to affect mainly prices of n

235、on-energy goods but may also add to price pressures in food and,to a lesser extent,in services and energy(see Box 1.1).Selling price expectations by business managers corroborate the prospects of continued disinflation in processed food and non-energy industrial goods.BCS selling price expectations(

236、SPE)in manufacturing of food and non-food consumer goods continued to trend down through January,falling to the lowest levels in three years(see Graphs 1.28a and b).In retail,however,selling price expectations picked up slightly for both food and consumer goods stores in December and January.Given h

237、igh historical correlations between respective SPEs(both in manufacturing and retail)and the 3m-o-3m momentum of consumer prices,with SPE leading the momentum by some 3-4 months,this could suggest some firming of price pressures in consumer goods and food in the second quarter.However,with the signa

238、l weakened by manufacturing SPE pointing firmly to a continuation of the downward trend,the rebound in momentum,even if it materialises,is unlikely to be strong.Given very weak momentum in both HICP components(see Graphs 1.21 and 1.28),this should not translate into a rebound in annual inflation rat

239、es,but,rather,may slightly flatten the still downward sloping annual inflation curves for industrial goods and processed food.-505101520-20-1001020304050607080Jan-13Jan-15Jan-17Jan-19Jan-21Jan-23Graph 1.28b:Food-BCS Selling Price Expectations vs.momentum in consumer prices,euro areaSelling price exp

240、ectations in retail trade*Selling price expectations in manufacturingMomentum in prices*(rhs)%3m-o-3m%Note:*3m-o-3m momentum in HICP processed foods(seasonally adjusted,annusalised)*Food stores.-30369-20-100102030405060Jan-13Jan-15Jan-17Jan-19Jan-21Jan-23Graph 1.28a:Consumer goods-BCS Selling Price

241、Expectations vs.momentum in consumer prices,euro areaSelling price expectations in retail trade*Selling price expectations in manufacturingMomentum in prices*(rhs)%3m-o-3m%Note:*3m-o-3m momentum in non-energy industrial goods(seasonally adjusted,annualised)*Non-food stores.Winter 2024(Interim)Foreca

242、st 27 All in all,inflation is set for a faster fall in 2024 compared to the Autumn Forecast,while the outlook for 2025 is broadly unchanged.Starting the year at lower-than-expected levels in both the EU and the euro area,the quarterly inflation profile is set to be flatter in 2024,but to continue tr

243、ending down over the forecast horizon(see Graph 1.29).The expiry of energy policy measures and the continued presence of non-negligible base effects should increase the volatility of annual inflation around trend in the near term.Following a slight uptick in 2024-Q1,headline inflation is expected to

244、 moderate marginally in the second half of the year,before declining more decisively next year,to just above the ECB target in the final quarter of 2025.In the euro area,annual average inflation is set to decline from 5.4%in 2023 to 2.7%in 2024(0.5 pps.below the Autumn Forecast)and 2.2%in 2025(uncha

245、nged from the autumn).In the EU,headline inflation is projected to ease from 6.3%in 2023 to 3.0%in 2024(0.5 pps.below the Autumn Forecast)and 2.5%in 2025(up by 0.1 pps.).Inflation expectations of financial markets moved closer to the ECB inflation target.The fast and broad-based disinflation process

246、 has also affected financial markets inflation outlook(see Section 1.3).Downside inflation surprises have pushed euro area inflation expectations at 1,3 and 5-year horizons down by-pps.since the Autumn Forecast,to 2.0-2.2%in late January,aligning them much more closely to the ECB inflation target(se

247、e Graph 1.30).Likewise,the ECBs Survey of Professional Forecasters in 2024-Q1 showed the outlook for headline inflation revised down to 2.4%(2024)and 2%(2025),some 0.3 pps.and 0.1 pps.down respectively,from the prior quarter.1.6.RISKS TO THE OUTLOOK Heightened geopolitical tensions tilt the balance

248、of risks to the outlook towards more adverse outcomes.Russias protracted war of aggression against Ukraine remains an important source of uncertainty for the EU economy.The extension of the conflict in the Middle East to the Red Sea is fuelling additional geopolitical tensions and already adding som

249、e upward pressure on prices.Further escalation could renew stress on supply chains,hampering global production and adding to price pressures on tradeable goods.Energy commodities also appear vulnerable.The EU is particularly exposed to these risks,due to its geographical proximity to the ongoing con

250、flicts,its deep integration in global value chains,its energy dependency and the fact that a significant share of its trade takes the Red Sea route(see Box 1.1).Global policy uncertainty also weighs on the EU economic outlook.Chinas economy is at a critical juncture.A faster-than-expected retrenchme

251、nt in economic activity,in the absence of a comprehensive re-orientation of policies,could have negative growth spillovers to the EU economy,but would also further relieve price pressures,especially on energy commodities.The opposite is true in case of a larger-than-expected acceleration of growth i

252、n China.In the US,a slower-than-anticipated disinflation process would require policy rates to stay higher for longer,which would strengthen the US dollar and worsen global 22.533.544.555.5623-Q324-Q124-Q325-Q125-Q3Graph 1.29:Forecast of annual HICP inflation compared to Autumn 2023 Forecast,EU and

253、euro areaEuro areaEUEuro area,AF23EU,AF23%1.61.82.02.22.42.62.83.03.2Jan-22Jul-22Jan-23Jul-23Jan-24%Graph 1.30:Inflation expectations in the euro area derived from implied forward inflation-linked swap rates5 years forward 5 years ahead3 years forward 3 years ahead1 year forward 1 year aheadSource:B

254、loomberg.Winter 2024(Interim)Forecast 28 financial conditions.Finally,2024 will be historic in terms of the number of people worldwide voting in elections,with policy uncertainty weighing on investor sentiment.Domestically,growth and inflation risks appear broadly balanced.On the upside,positive sur

255、prises to EU growth could come from faster normalisation of saving behaviour.This would support consumption but could slow the decline in inflation.Higher-than-expected wage growth and a lower-than-anticipated fall in profit margins could also lead to inflation turning out higher than projected.On t

256、he downside,a stronger or more persistent transmission of the still tight monetary conditions could further delay the rebound in economic activity,pushing inflation lower.Moreover,financial market exuberance in anticipation of lower policy rates risks offsetting monetary authorities efforts to bring

257、 inflation back to target.Finally,mounting risks associated to climate change still weigh on the outlook.The materialisation of these risks bears severe costs for the EU economy,in terms of losses in natural capital and key infrastructure,including residential housing and production capital,as well

258、as possible disruptions in economic activity.2.PROSPECTS BY MEMBER STATES Winter 2024(Interim)Forecast 29 EURO AREA 2.1.BELGIUM The Belgian economy is estimated to have expanded by 1.5%in 2023,slightly more than projected in autumn.Real GDP increased by 0.4%q-o-q in both the third and fourth quarter

259、s of the year.Private consumption was resilient in 2023,supported by the automatic indexation of wages and social benefits,which contributed to maintaining household purchasing power.Furthermore,investment recovered strongly,on the back of a rebound in corporate investment.Going forward,private cons

260、umption is expected to expand further,as consumers face lower price increases and employment is still projected to grow.At the same time,the energy transition and the implementation of the Recovery and Resilience Plan(RRP)are set to support gross fixed capital formation.Public investment in infrastr

261、ucture is also projected to accelerate in the run-up to the 2024 election cycle.By contrast,investment in residential construction is expected to continue to be held back by high financing costs in the short term,before recovering over the forecast horizon amid a moderate easing of financing conditi

262、ons.After a strong decline in 2023,exports and imports are set to rebound to some extent in 2024 and more vigorously in 2025,in tandem with trading partners prospects.The contribution of net exports to GDP growth is however forecast to remain negative in 2024 and in 2025,with imports pushed up by pr

263、ivate consumption.Overall,GDP growth is forecast to reach 1.4%in 2024 and 1.5%in 2025,unchanged compared to the Autumn 2023 Forecast.HICP inflation fell to 2.3%in 2023,reflecting the fast transmission of declining wholesale gas and electricity prices to retail prices,along with the effect of governm

264、ent measures to dampen price increases.The withdrawal of these measures is expected to put upward pressure on headline inflation,resulting in a projected increase to 3.5%in 2024.HICP inflation is forecast at 2.3%in 2025 as energy prices are expected to increase at a slower pace.This is lower than in

265、 the Autumn Forecast for 2024 and slightly higher for 2025.2.2.GERMANY Economic activity in Germany is estimated to have contracted by 0.3%in 2023,as projected in autumn.Private consumption suffered from a loss in purchasing power.High building and borrowing costs on top of labour shortages and elev

266、ated energy prices depressed investment in construction and energy-intensive sectors.Sentiment indicators continue to be weak,with some indicators in January having reached their lowest levels since the COVID-19 crisis,pointing to subdued economic growth in the first half of 2024.Investment growth i

267、s projected to remain low relative to pre-pandemic values,weighed down by downbeat investor sentiment entering the year.Labour shortages continue to be a bottleneck to activity.A trade-led recovery is also unlikely,as exports and imports are set to grow at broadly the same pace in both forecast year

268、s.Tighter fiscal policy conditions are also expected to have a dampening impact on short-term growth prospects.On the positive side,market financing conditions have eased moderately and further easing is expected through the bank lending channel.In addition,real incomes are expected to benefit from

269、a robust labour market and rising real wages,which are set to support private consumption over the forecast horizon.-8-6-4-20246816171819202122232425Graph 2.1:Belgium-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)fore

270、castpps.Winter 2024(Interim)Forecast 30 Overall,real GDP is forecast to increase by 0.3%in 2024 and 1.2%in 2025.For 2024,this implies a downward revision from 0.8%projected in the Autumn Forecast,while the forecast for 2025 remains unchanged.HICP inflation decelerated from its peak of 11.6%in Octobe

271、r 2022 to 6.0%in 2023 as a whole and to 3.1%in January 2024.This reduction is mainly driven by the decline in wholesale energy prices and the introduction of energy support measures,which were discontinued in November 2023.HICP inflation is projected to reach 2.8%in 2024 and 2.4%in 2025.This is broa

272、dly in line with the Autumn Forecast.Inflation in both years is forecast to be driven mainly by the services sector,where wage growth is temporarily keeping inflation elevated as expected in the Autumn Forecast 2023.By contrast,energy price growth is set to contribute only slightly to inflation goin

273、g forward.2.3.ESTONIA Estonias real GDP is estimated to have contracted by 3.5%in 2023,more than projected in autumn,with the downturn becoming broad-based and affecting not only investment but also private consumption and,particularly,exports.The latter were impacted by weak external demand and dep

274、reciations of major trading partners currencies.Despite the two-year recession,the labour market continued to be remarkably resilient in 2023.The unemployment rate remained low,while employment increased in the second half of the year.Wages grew strongly,though not yet fully compensating for the pur

275、chasing power lost due to high inflation over the last years.Early indicators point to a weak start of 2024.Business confidence moved sideways in pessimistic territory over the last few months,with some improvement in industry and construction,but worsening in the retail sector.Consumers expect thei

276、r financial situation to deteriorate due to the higher VAT and excise taxes applied as of 2024,still elevated inflation,and high borrowing costs.This suggests that domestic demand is set to be very modest in the first half of the year.Combined with subdued external demand from the countrys main trad

277、ing partners,this prompts a large downward revision of real GDP growth in 2024,to 0.6%,compared to 1.9%in the Autumn Forecast.In 2025,growth is expected to resume on the back of an improving external environment,more favourable financing conditions and rising consumption,as purchasing power is resto

278、red through the combination of falling inflation and rising wages.It is projected at 3.2%,higher than in the Autumn Forecast.Estonia recorded 9.1%HICP inflation in 2023,down from double digits in the first half of the year but still above 4%in the last quarter,despite significantly falling global en

279、ergy prices and moderation in food and industrial goods inflation.The higher VAT applied as of 1 January 2024 is set to keep prices high,but inflation is expected to gradually decline in line with global trends,averaging 3.2%in 2024 and 1.9%in 2025.This is slightly lower than in the Autumn Forecast

280、for both years.-6-5-4-3-2-10123416171819202122232425Graph 2.2:Germany-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.-8-6-4-202468101216171819202122232425Graph 2.3:Estonia-Real GDP growth and contributionsN

281、et exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.Winter 2024(Interim)Forecast 31 2.4.IRELAND Real GDP in Ireland declined by 1.9%q-o-q in the third quarter of 2023,extending the recession observed in the first half of the year.This downturn w

282、as primarily influenced by sustained weakness in pharmaceutical exports and contract manufacturing activity by multinational enterprises.In contrast,modified domestic demand,which better reflects underlying domestic activity,was broadly unchanged in the third quarter.Consumer spending remained resil

283、ient,supported by a strong labour market,while the moderation of previously strong physical investment in 2022 acted as a drag on economic activity.Preliminary estimates suggest a continued decline in real GDP during the fourth quarter of 2023,by 0.7%q-o-q,bringing the contraction in GDP to 1.9%in 2

284、023 as a whole,compared to 0.9%in autumn.A resilient labour market,decelerating inflation and rising real incomes are expected to underpin further private consumption growth in 2024 and 2025.Investment is set to grow only moderately in 2024 due to a muted demand outlook and to pick up pace in 2025 a

285、s financial conditions continue to ease.Ongoing increases in both housing completions and starts suggest that dwelling investment remains strong over the forecast horizon.The export outlook is expected to be positive in 2024 and 2025,supported by an improvement in external trade conditions coupled w

286、ith recent large-scale investments.GDP growth in 2024 has been revised down substantially to 1.2%compared to 3.0%in the Autumn Forecast,mainly reflecting a lower-than-projected carry-over from 2023.In 2025,economic activity is expected to expand by 3.2%,slightly lower than in the Autumn 2023 Forecas

287、t.HICP inflation decelerated notably in the final months of 2023,largely driven by the pass-through of falling wholesale energy prices to consumers.Annual inflation in 2023 averaged 5.2%and is projected to ease further over the forecast horizon as energy prices and commodity prices recede.Domestic p

288、rice pressures are expected to continue,driven by sustained tightness in the labour market.Overall inflation is projected at 2.2%in 2024 and 1.9%in 2025,lower than forecast in autumn.2.5.GREECE Greeces real GDP is estimated to have grown by 2.2%in 2023,slightly lower than in the Autumn Forecast.Foll

289、owing the strong recovery in 2022,consumption growth decreased substantially but remained one of the main growth drivers last year.Despite tightening financing conditions,investment made a significant contribution,thanks to strong construction activity and the implementation of the Recovery and Resi

290、lience Plan(RRP).The slower than expected recovery of Greeces key EU trade partners weighed on export growth,still net exports had a positive contribution to growth.Economic growth is expected to remain broadly stable at 2.3%in 2024 and 2025,broadly as expected in autumn.Real consumption is set to e

291、xpand at similar -30-20-1001020304016171819202122232425Graph 2.4:Ireland-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.-15-10-5051016171819202122232425Graph 2.5:Greece-Real GDP growth and contributionsNet

292、exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.Winter 2024(Interim)Forecast 32 rates as in 2023,resulting in a slightly lower contribution to real GDP growth.Investment is expected to pick up sizeably as the RRP implementation gains speed,and

293、as financing conditions ease.The composition of gross fixed capital formation is projected to shift from construction to more productive investments such as equipment and machinery.However,investments are likely to induce higher import demand for both goods and services,which is projected to reduce

294、the positive contribution of net exports in 2024-25.Annual HICP inflation moderated to 4.2%in 2023.Underlying inflation excluding energy and food prices was substantially higher,at 5.3%in 2023 on average,but declined below the level of HICP inflation by December 2023.This reflects a progressive mode

295、ration of demand pressures on core prices and lower-than-expected pass-through of previous energy and food price shocks.The tightening labour market,together with the recently announced minimum wage increase(as from April 2024),is expected to put some upward pressure on prices,which would partly off

296、set the impact of lower energy prices on inflation.Overall,HICP inflation is expected to decline more gradually in 2024 and 2025,to 2.7%and 2%respectively.This is marginally lower than in the Autumn Forecast in both years.2.6.SPAIN The Spanish economy is estimated to have expanded by 2.5%in 2023,mar

297、ginally above what was projected in autumn,with preliminary data for the fourth quarter pointing to an acceleration(0.6%q-o-q)compared to the third quarter.Private consumption and,to a lesser extent,investment were the key drivers of GDP growth throughout 2023.External demand,which contributed negat

298、ively to economic expansion in the second and third quarters of last year,picked up in the fourth quarter.Real GDP growth is forecast to moderate to 1.7%in 2024,unchanged from autumn,owing to the combination of several factors.On the external side,the fading impetus of the tourism sector and the sti

299、ll weak economic situation in Spains main trading partners are projected to limit the dynamism of exports.On the domestic front,the lagged impact of interest rate hikes is set to weigh on domestic demand,especially in light of the still elevated,albeit declining,internal and external debt-to-GDP rat

300、ios.Still,consumption and investment are set to sustain the economic expansion this year,also benefitting from a higher-than-anticipated carry-over from 2023.Private consumption is expected to be supported by further real income gains for households and by the partial use of the still high level of

301、household savings.After the buoyancy showed in 2023,employment growth is projected to decelerate this year,but will still contribute to sustaining economic activity.Investment growth is expected to be underpinned by the broadening implementation of the Recovery and Resilience Plan.It will also be up

302、held by the healthy financial position of non-financial corporations and the expected easing of financing conditions over the forecast horizon.GDP growth is set to accelerate again in 2025,to an unrevised 2.0%,on the back of reinvigorated investment growth and the projected positive contribution fro

303、m external demand.Annual HICP inflation decelerated to 3.4%in 2023,favoured by the sustained decline in energy prices throughout the year.Underlying price pressures eased more gradually as the pass-through of high energy prices to other items faded out in the last quarter of 2023.Headline inflation

304、is set to moderate further this year,reaching 3.2%on average,with the downward trend of underlying price pressures expected to continue in the coming quarters.At the same time,the expected phasing out of most government measures to mitigate the impact of high energy prices would exert upward pressur

305、e on inflation.HICP inflation is forecast to -15-10-5051016171819202122232425Graph 2.6:Spain-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.Winter 2024(Interim)Forecast 33 decrease further to 2.1%in 2025.Fo

306、r 2024,this is slightly lower than in the Autumn Forecast,while the forecast for 2025 remains unchanged.2.7.FRANCE GDP is estimated to have grown by 0.9%in 2023,driven by strong growth in the second quarter.This is marginally below the Autumn 2023 Forecast.High inflation and tighter financial condit

307、ions weighed on growth throughout the year despite government support measures and a very favourable labour market,accompanied by dynamic wages that preserved households purchasing power.While net exports contributed positively to growth,these were fuelled mostly by a decrease in imports of goods,as

308、 the growth of domestic demand was limited.In 2024,GDP is expected to grow moderately,by 0.9%annually,a downward revision of 0.3 pared to the Autumn Forecast.The revision can be mainly attributed to a lower carry-over from a weaker than expected second half of 2023.Economic activity is expected to g

309、ather momentum in the second half of 2024.Private consumption is set to drive GDP growth on the back of rapidly declining inflation.Investment is expected to remain subdued until the second half of the year due to still restrictive financing conditions but is then set to start recovering.Net exports

310、 are projected to make no contribution to GDP growth given that imports are set to rise-pushed by strong demand-while exports of goods are only expected to progressively catch up with their pre-crisis level.In 2025,GDP growth is forecast at 1.3%,marginally below the Autumn Forecast.Economic activity

311、 is expected to be further driven by private consumption as inflationary pressures dissipate,and households saving rate declines gradually towards its historical average.Investment from both households and corporations is projected to recover progressively.Net exports are set to have a limited contr

312、ibution to growth,with strong exports growth offset by rising imports as domestic demand expands.After peaking at 7.0%in the first quarter of 2023,HICP inflation decreased throughout the year to reach 4.2%in the fourth quarter,largely thanks to declining energy and commodity prices.The progressive p

313、hasing-out of energy-related measures and the increase of the electricity tax in February 2024,to roughly two-thirds of its pre-crisis level,will lead to an increase in electricity prices of close to 10%.Meanwhile,wage increases are still set to feed underlying price pressures.However,the downward t

314、rend in inflation is set to continue over the forecast horizon.After 5.7%in 2023,inflation is expected to reach 2.8%in 2024 and 2.0%in 2025.For 2024,this is slightly lower than in autumn,while the forecast for 2025 remained unchanged.2.8.CROATIA Croatias GDP growth is estimated to have remained robu

315、st in 2023,at 2.6%,unchanged compared to the Autumn 2023 Forecast.Economic activity was supported by domestic demand.Private consumption benefited from favourable wage developments and strong consumer sentiment,while monthly retail trade data point to an acceleration in the fourth quarter.Strong inv

316、estment growth was supported by EU funds,including those under the 2014-20 multiannual financial framework,which had to be absorbed by the end of 2023.While exports of goods declined last year due to weak external demand,overall(net)trade contributed positively to growth amid strong services exports

317、(mainly tourism)following the euro adoption and accession to the Schengen area at the beginning of 2023.-10-8-6-4-20246816171819202122232425Graph 2.7:France-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.Wi

318、nter 2024(Interim)Forecast 34 In 2024,real GDP is forecast to also grow by 2.6%,mainly on account of strong domestic demand,and reflecting significant carry-over effects.This is marginally above the Autumn Forecast.Household consumption growth is set to accelerate as inflation abates and employment

319、and real wages continue to increase.Significant support to wage growth is expected from the government sector,where considerable(one-off)increases are envisaged from the public sector wage-setting reform.Investment and public consumption growth are forecast to decelerate,but remain solid,also in lig

320、ht of the continued implementation of the Recovery and Resilience Plan and the expected easing of financing conditions.After reaching comparatively high levels,growth of services exports is forecast to slow down,while exports of goods are projected to grow again with the progressive recovery of exte

321、rnal demand.Due to higher imports growth,net exports are however expected to provide a small negative contribution to GDP growth.In 2025,GDP growth is forecast at 2.8%,unchanged from autumn,and set to remain broad-based.Some rebalancing is expected,with the positive contribution of domestic demand l

322、ikely to decline,and foreign trade adding to growth amid further strengthening of exports.HICP inflation declined to 8.4%in 2023,from 10.7%in 2022,while inflation excluding energy and food was 8.8%.Both exceeded the corresponding euro area rates of 5.4%and 5%,respectively.The deceleration of HICP in

323、flation over 2023 was mainly driven by energy and processed food prices.Services inflation proved to be more persistent,with a considerable contribution coming from services related to tourism,largely reflecting foreign demand.HICP inflation is forecast at 2.5%and 2%in 2024 and 2025,with the prices

324、of energy and unprocessed food expected to drive the downward trend,while services inflation is projected to remain stickier.Compared to autumn,this is broadly unchanged for 2024 but revised up for 2025.There is a risk of a slower-than-expected decline in inflation due to wage cost pressures,especia

325、lly if these are not absorbed by firm profits.2.9.ITALY Real GDP is estimated to have grown by 0.6%in 2023,marginally below the Autumn 2023 Forecast,as private consumption moderated and investment slowed down considerably,due to rising financing costs and the phasing out of housing renovation tax cr

326、edits.After decreasing by 0.3%in the second quarter,GDP edged up in the third and fourth quarters,providing a marginally positive carryover into 2024.Economic output is forecast to continue growing slowly in 2024,with households purchasing power expected to benefit from disinflation and an increase

327、in wages,against the background of a resilient labour market.Investment is set to recover,driven by government and RRF-funded infrastructure projects offsetting the drag from lower expenditure on housing construction.Annual GDP is projected to grow by 0.7%in real terms,slightly lower than expected i

328、n autumn.-15-10-505101516171819202122232425Graph 2.8:Croatia-Real GDP growth and contributionsNet exportsInvestmentPrivate consumptionPublic consumptionChanges in inventoriesReal GDP(y-o-y%)forecastpps.Winter 2024(Interim)Forecast 35 Investment is expected to accelerate in 2025,as the implementation

329、 of RRF-backed projects gathers pace,boosting both infrastructure spending and the purchase of firms tangible and intangible assets,which is also anticipated to benefit from improving financial conditions.This surge in capital spending is set to translate into stronger growth of imports,above the mi

330、ldly improving outlook for exports.Overall,real GDP is forecast to increase by 1.2%in 2025,unchanged compared to autumn.HICP inflation decreased steadily last year from the 2022 peak,driven by rapidly falling energy prices gradually passing through to the other goods,but also by the limited increase

331、s in services inflation.In the fourth quarter of 2023 inflation fell back to 1%y-o-y and stayed below 1%in January.Moderate wage increases have so far helped to keep inflation in check.As the main collective labour contracts are being gradually renewed,workers are expected to recover the past losses

332、 of purchasing power.HICP inflation is projected at 2.0%in 2024 and at 2.3%in 2025 on the back of an expected pick-up in wages,led by the public sector.Compared to autumn,this is revised down for 2024 but remains unchanged for 2025.2.10.CYPRUS Real GDP growth in Cyprus slowed down to 2.5%in the firs

333、t three quarters of 2023(y-o-y)compared to 5.8%for the same period of 2022,mainly due to a lower external demand for non-tourism services.Still,demand for tourism services continued its rebound in 2023,with arrivals increasing by 20.1%,almost reaching pre-pandemic levels.Private consumption remained robust,supported by real wage increases and continued employment growth,1.6%.For the whole of 2023,