MILAN: Rating agency S&P Global cut on Monday its 2024 euro zone growth forecast to 1.0% from 1.4% citing headwinds from sticky inflation forcing the European Central Bank to raise rates for longer than expected.

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“Headline inflation will not return to target before first-quarter 2025, and core inflation before third-quarter 2025,” it said in a statement. “The near-term outlook for the eurozone economy appears complicated. A restrictive monetary policy will transmit to domestic demand, while interest rates should turn positive in real terms in 2024”.

S&P also raised its 2023 growth forecast to 0.3% from zero. The agency said this was not “akin to stronger demand”. The scenario for 2023 is one of stagnation, S&P said.