Economy ends 2024 on a strong footing

GDP growth slows slightly: GDP growth moderated slightly to 3.7% year on year in the fourth quarter from 3.9% in the third quarter. On a seasonally adjusted quarter-on-quarter basis, economic growth improved to 1.4% in Q4, following the previous quarter's 0.4% growth and marking the fastest growth since Q4 2023. In 2024 as a whole, GDP grew 3.8%, above both 2023’s 3.3% print and the 2014–2023 average of 2.9%.

Destocking and imports cap growth: The deceleration was driven by destocking and stronger imports growth; elsewhere in the economy, momentum strengthened from Q3. Domestically, inventories nearly halved in Q4 after an over 40% expansion in Q3. That said, household spending growth picked up to 6.3% year on year in Q4 from 5.5% in Q3. Moreover, public spending sped up to 7.1% in Q4 (Q3: +5.3% yoy), while fixed investment growth accelerated moderately to 9.5% in Q4, following the 9.2% expansion recorded in the prior quarter. On the external front, imports of goods and services growth rose to 9.9% in Q4 (Q3: +4.1% yoy). Meanwhile, exports of goods and services growth accelerated to 4.7% year on year in the final quarter of 2024 (Q3: +1.5% yoy)—the best reading since Q1 2023.

GDP growth to ease but remain strong: Our panel expects growth to moderate in 2025 from 2024’s brisk pace, though it will remain around trend and well above the Euro area average. Domestic demand is forecast to moderate amid slower real income growth, but stronger Euro area demand is expected to boost exports growth. Weaker-than-expected Euro area activity poses a downside risk.

Panelist insight: Alen Kovac, analyst at Erste Bank, commented: “As 2025 goes we continue to expect GDP growth remaining in decent gear around 3%, with risks tilted to the downside, mostly owing to external environment and growing uncertainty. Domestic demand is anticipated to continue to support above-EU average growth momentum, yet expectedly likely a bit more moderate compared to what we saw in 2024.”

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