No recession in sight this year in the euro zone, according to an ECB survey

FRANKFURT, June 13 (Reuters) – The eurozone economy is expected to escape a recession this year and growth is even expected to pick up in the third quarter, according to a survey released by the European Central Bank (ECB) on Monday.

The Eurozone economy has been hit hard by the fallout from the war in Ukraine, which has severely shaken consumer confidence, investment and purchasing power with the sharp rise in fuel and food prices.

Growth in gross domestic product is expected to slow to 0.1% in the second quarter before accelerating to 0.4% in the third and fourth quarters, shows the quarterly survey of forecasters carried out by the Frankfurt institution.

The survey, conducted ahead of the ECB’s June meeting, also shows that forecasters expect the central bank to raise its deposit rate by 75 basis points this year and 150 basis points by the end of 2023, to reach a maximum rate of 1.25% in mid-2024.

Faced with inflation which reached 8.1% over one year in May, the ECB announced last Thursday that it would raise its interest rates in July for the first time since 2011, specifying that it did not exclude a higher rise in September if inflation does not slow.

Inflation in the euro zone is expected to return to 2%, the target set by the ECB, by the first quarter of 2024, according to the survey. (Report Balazs Koranyi, French version Laetitia Volga, edited by Kate Entringer)