Economists of the American financial conglomerate Morgan Stanley said that given the reduction in energy supplies from Russia (and the prospect of a complete cessation of supplies), the deterioration of consumer and business confidence, as well as extremely high inflation, there is a possibility that at the end of this year the eurozone economy will be in a moderate recession.
According to economists' forecasts, the eurozone's GDP will shrink for two quarters, but in the second quarter of 2022, the economy may show expansion amid increased investment.
As for the outlook for the monetary policy of the European Central Bank (ECB), economists expect that ECB policymakers will raise the deposit rate at each meeting this year, resulting in the rate reaching 0.75% by December (compared to -0.5% currently). Meanwhile, they warned that if the economic outlook worsens, the ECB may pause in raising rates after the September meeting.