Inflation is melting like snow in the sun in the eurozone.
Eurostat’s rapid estimate shows only 2.4% in November, compared with another 5.2% in August. The sharp decline in energy prices in recent months has played a significant role. Over a year, they fell by 11.5% and contributed decisively to the slowdown in price growth, excluding energy, and inflation is still at 4.3%. But elsewhere, inflationary pressures remain very present. This is the case in services, whose prices are up 4% over one year.
The labour market remains tight – unemployment remained stable at 6.5% in September, a record low. In food, the increase varies around 7% depending on whether the food is processed or not.
Despite this, this decline allows households and investors to dream of a return to cheaper credit, with a first fall in key rates faster than initially expected and a purchasing power that would be less under pressure.
Our economies need it. For now, the economy is weak, and the eurozone is stagnating. Figures published this week show a contraction in France (-0.1% compared to the previous quarter in the 1st quarter) an Italy that barely evolves (+0.1%).
Over 2023, growth will be limited, just as it was in 2024, and even beyond, the outlook remains bleak.
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