A new report from JP Morgan Asset Management posits that GDP growth is set to accelerate in the eurozone next year.
The report, which is called Guide to the Markets, said GDP growth in the US is set to slow down after speeding up in 2023 and 2024, falling from roughly 2.6% to 0.8%. Conversely, it believes that GDP growth on these shores will rise from about 0.6% in 2024 to roughly 1.2% next year.
Dr David Kelly, chief global strategist at JP Morgan, said in notes on the US version of the statistics: “Global economic activity has improved from last year’s sluggish pace, although there has been divergence beneath the surface. Manufacturing activity remains subdued in Europe while domestic demand in China has been weak.”
See also: French bond yields rise above Spain for first time in decade-and-a-half
He added: “However, other parts of Asia are benefitting from a turn in the electronics cycle, driven by investments in AI and other advanced technologies. With many global central banks focused on normalising policy, renewed economic tailwinds should highlight plenty of attractive opportunities across global markets.”
Concurrently, the European version of the report says that inflation across the continent decreased at a much quicker pace than in the US, falling from 10.5% in October 2022 to 1.8% in September 2024. Over roughly the same period, inflation in the US went from 7.7% to 2.5% in August.
Within Europe, inflation fell most rapidly in Italy, going from 12.6% in October 2022 to 0.8% last month. Germany, meanwhile, remained stubbornly high in comparison to the rest of the continent, going from 11.6% to 1.8%. Another interesting aspect of Germany is that, according to JP Morgan, it is the only country that has seen the number of people claiming unemployment go up (the others were France, Italy, and Spain).
Despite this, the overall unemployed within Europe has steadily fallen since the highs of 2021. However, there has also been a steep tail-off in wage growth across the eurozone.
