The eurozone economy has been stagnant over the past four quarters and growth is expected to remain lacklustre in 2024. Domestic demand was hit by a significant tightening of financial conditions due to unprecedented monetary policy tightening by the ECB, while weak global growth weighed on exports. Inflation has fallen rapidly since its 10.6% peak in October 2022, ending up at 2.4% in November 2023. Core inflation has been more sticky, but is also on a downward trajectory. Wage growth accelerated in 2023, making up for past losses in real income, but deteriorating labour market conditions should result in lower wage growth moving into 2024. Tightening government finances are expected to weigh on growth in 2024.