Frankfurt (Reuters) – A key survey from the European Central Bank released on Monday showed that the euro zone will not go into a recession this year. Instead, growth will pick up after hitting a low point in the second quarter.
Russia’s invasion of Ukraine has caused problems for the 19 countries that use the same currency. For example, fuel and food prices have gone up sharply, which has hurt confidence, investment, and people’s ability to buy things.
The ECB’s Survey of Monetary Analysts showed that the economy is now expected to grow by 0.1% in the second quarter and by 0.4% in both the third and fourth quarters.
The survey, which is an important part of how the ECB decides on policy, also said that the ECB would raise its deposit rate by a total of 75 basis points this year and 150 basis points by the end of next year, with the rate reaching its highest point of 1.25 percent in the middle of 2024.
The survey was made before the ECB said that rates would go up by 25 basis points in July and possibly by a bigger amount in September. It was shown to policymakers at the ECB meeting last week.
The ECB will raise rates because it wants to keep inflation in check. According to the survey, inflation is expected to be back at the 2% goal by the first quarter of 2024.
