Daily Management Review

Morgan Stanley improves economic growth forecast for euro area


According to a study by Morgan Stanley, economic growth in the euro area this year may be slightly better than anticipated, especially due to decreased energy prices.

The statement reads, "We are increasing our growth prediction for 2023 to 0.5% from 0.2%. There are two reasons for doing this. First, fourth-quarter results exceeded expectations. Second, lower energy prices translate into lower inflation, which lessens pressure on real household earnings and spending."

The 2023 inflation forecast was reduced by Morgan Stanley from 6.4% to 5.4%. "The data are being updated, but not the core narrative. There is a serious recession in the eurozone," note the analysts.

Midway through December, the European Central Bank (ECB) reduced its forecast for eurozone GDP growth in 2023 from 0.9% to 0.5%. The forecast for 2024 stayed at 1.9%.

source: marketscreener.com