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  "documentTitle": "ey global economic outlook july 2023",
  "authorId": "MorganStanley",
  "authorName": "EY Parthenon",
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  "notes": "Includes a bar chart comparing 2023F vs 2024F inflation by country and a line chart showing the share of product categories exceeding specific inflation thresholds.",
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      "text": "As the effects of supply shocks fade, we expect inflation in most countries to return relatively close to central bank targets by 2024, with the euro area inflation averaging 1.7% in 2024.",
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      "text": "Euro area HICP y/y inflation growth 2023-24F",
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      "text": "Euro area share of product categories by y/y price growth threshold 2013-23",
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      "text": "Inflation in EU countries peaked in 2022 Q4-2023 Q1 and is now quickly decelerating. The disinflation was initially driven by declining energy prices and base effects, but more recently, core and food price inflation rates have also begun to ease, as the effects of previous supply shocks have started to fade and demand faltered.\nWhile trends in inflation are similar across countries, inflation levels vary significantly, primarily due to differences in the sensitivity to commodity price shocks as well as differences in labor market tightness. CEE countries exhibit the highest inflation rates due to their fossil-fuel energy mix, higher shares of food and energy in inflation baskets, relatively tight labor markets, and past exchange rate depreciation. Southern Europe, on the other hand, exhibits the lowest inflation in the EU as labor slack, despite declining, remains relatively large.\nDisinflation is proceeding faster where inflation was higher, where energy prices fall faster due to government regulations (e.g., Spain) or measurement issues (e.g., the Netherlands and Belgium, where only new energy contracts enter into CPI calculations), or where demand is particularly subdued (Czechia). In Spain, headline inflation has already fallen below the 2% target.\nAs the effects of supply shocks fade, we expect inflation in most countries to return relatively close to central bank targets by 2024, with the euro area inflation averaging 1.7% in 2024. Two clear exceptions are Poland and Hungary, where tight labor markets, expansionary fiscal policy and the phase-out of temporary VAT cuts will keep inflation elevated for longer, with headline inflation returning to targets only in 2025 or 2026.",
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      "text": "y/y inflation growth: 1.7%",
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      "text": "Source: EY analysis",
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      "text": "Most EU economies will see inflation near or at central bank target by the end of 2024; in CEE, particularly Poland and Hungary, inflation will remain elevated for longer",
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