Goldman economists no longer expect calm in the region’s economy as the Eurozone economy is more resilient by the end of 2022, gas prices have fallen sharply, and China has eased COVID-19 restrictions.
Institutional economists led by Jari Stehn, who previously expected a 0.1 percent contraction this year, announced that they now expect a 0.6 percent growth. It is predicted that growth will be weak in winter due to the power crisis, while the economy will grow by 0.1 percent in the first quarter.
Inflation expectations were raised to 3.25%. Economists stated that due to rising labor costs in services inflation, upward pressures will continue and interest rate hikes should continue in the coming months.
Economists reiterated their predictions that the ECB will increase by 50 basis points in February and March meetings, and a final increase by 25 basis points in May.