Eurozone economy will grow, not shrink in 2023 – Rabobank

Economists at Rabobank have revised their economic forecasts for the Eurozone. They have significantly upgraded projections for the Eurozone in 2023 from -0.5% to 0.3%.

Good news, but with a disclaimer

“Lower energy prices, generous government subsidies and overall economic resilience will boost economic growth in the short run. As a consequence, we expect inflation to stay elevated for longer, just as interest rates. Combined with the fact that in most countries there is no more pandemic-related pent-up demand to be expected, this makes us forecast lackluster growth in the medium run.”  

“We have quite substantially upgraded our forecast for 2023; we expect the economy to grow by 0.3% rather than contract with -0.5%. At the same time, we have slightly downgraded our forecast for 2024 from 1.2% to 0.9%.”