Economic activity in the Euro Area had a slight slowdown in the third quarter of 2023, and indicators signal a potential economic contraction in December, reinforcing the likelihood of a technical recession in the latter half of last year and a bleak outlook for the near future, European Central Bank Vice President Luis de Guindos said in a speech at the 14th edition of Spain Investors Day. Simultaneously, Guindos anticipates the rapid disinflation observed in 2023 to decelerate in 2024 and temporarily pause at the year’s beginning due to the expiration of energy-related compensatory measures, which may trigger a brief inflationary uptick. Additionally, he noted there are signs of a gradual labor market loosening, marked by a slight decline in total hours worked in Q3 2023, its first dip since 2020, and ongoing decreases in job vacancy rates.
