Analysts have recently found out why the European economy looks like a cozy boat in calm waters. There are two main reasons for that. The fact is that European citizens have to save on everything, while exports are rapidly falling. ECB President Christine Lagarde has unveiled the mystery of the sluggish eurozone economy.
At a press conference, Christine Lagarde said that people did not spend as much as they did earlier, and businesses were cutting exports amid lower foreign demand for their goods and services. Notably, the European Central Bank announced that the key interest rate remained unchanged at 4.5%.
In addition, the outlook for economic growth in 2024 has become more modest. Economists expect only a 0.6% rise compared to the previous forecast of 0.8%. Inflation forecasts were also downwardly revised to 2.3% from 2.7% for this year. In 2025, analysts foresee inflation at only 2% instead of 2.1%.
Judging by the current situation, the European economy may undergo some unexpected changes.
