IMF Staff Country Reports

Euro Area Policies: 2024 Annual Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries

July 30, 2024

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Format: Chicago

International Monetary Fund. European Dept. "Euro Area Policies: 2024 Annual Consultation-Press Release; Staff Report; and Statement by the Executive Director for Member Countries", IMF Staff Country Reports 2024, 248 (2024), accessed November 21, 2024, https://0-doi-org.library.svsu.edu/10.5089/9798400283574.002

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Summary

The 2024 Article IV Consultation explains that the euro area is recovering gradually, with a modest acceleration of growth projected for 2024, gathering further speed in 2025. Increasing real wages together with some drawdown of household savings are contributing to consumption, while the projected easing of financing conditions is supporting a recovery in investment. A modest pickup in growth is projected for 2024, strengthening further in 2025. This primarily reflects expected stronger consumption on the back of rising real wages and higher investment supported by easing financing conditions. Inflation is projected to return to target in the second half of 2025. The economy is confronting important new challenges, layered on existing ones. Beyond returning inflation to target and ensuring credible fiscal consolidation in high-debt countries, the euro area must urgently focus on enhancing innovation and productivity. Higher growth is essential for creating policy space to tackle the fiscal challenges of aging, the green transition, energy security, and defense.

Subject: Fiscal consolidation, Fiscal policy, Inflation, Labor, Labor markets, Prices

Keywords: EU climate, EU industrial, EU institution, Europe, Fiscal consolidation, Global, Headline inflation, Inflation, Labor markets, Two-sided inflation risk

Publication Details

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