Jun 13, 2022 04:52AM ET
The eurozone will not experience a recession this year and growth will accelerate sharply after a second-quarter slowdown, according to a European Central Bank survey released on Monday.
The 19-nation currency bloc has been hit by the fallout from Russia's invasion of Ukraine, which has dented confidence, investment and household purchasing power through sharp rises in fuel and food prices.
The ECB now expects the economy to expand by 0.1 per cent in the second quarter and growth to accelerate to 0.4 per cent in both the third and fourth quarters, the ECB's survey of currency analysts showed.
The survey, a key element in the ECB's monetary policy deliberations, also forecasts that the ECB will raise the deposit rate by a total of 75 basis points this year and by a total of 150 basis points by the end of next year, with the rate peaking at 1.25 per cent in mid-2024.
The survey, presented to policymakers at last week's ECB meeting, was compiled before the ECB announced that rates would be raised by 25 basis points in July and possibly a higher amount in September.
The rate hike comes at a time when the ECB is struggling to contain inflation, which is expected to return to its 2% target by the first quarter of 2024, according to the survey.