The likelihood that the eurozone will fall into a deep recession this winter is receding according to economists who have scaled back their projections as greater fiscal support from governments, lower gas prices and a mild autumn help to improve the bloc’s outlook.
Most forecasters still expect eurozone output to contract in the coming quarters. The European Commission said earlier this month that it expects the economy to shrink by 0.5 per cent in the fourth quarter and by 0.1 per cent in the opening three months of next year — in line with estimates by private-sector analysts.
But the downturn will be more moderate than previously feared. Economists forecast eurozone growth of 3.2 per cent for 2022 as a whole — up from an earlier projection of 2.7 per cent in July, according to the latest compilation of forecasts from Consensus Economics which also reflect the bloc’s better than expected resilience in the three months to September.