A symphony of light consisting of bars, lines, and circles in blue and yellow, the colors of the European Union, illuminates the south facade of the European Central Bank (ECB) headquarters in Frankfurt, Germany, on Dec. 30, 2021. (Wolfgang Rattay/Reuters)
FRANKFURT—The eurozone will avoid a recession this year and growth will accelerate noticeably after bottoming out in the second quarter, a key European Central Bank survey showed on Monday.
The economy is now expected to grow by 0.1 percent in the second quarter, accelerating to 0.4 percent in both the third and fourth quarters, the ECB’s Survey of Monetary Analysts showed.
The survey, a key input in ECB policy deliberations, also predicted that the ECB would raise its deposit rate by a combined 75 basis points this year and a combined 150 basis points by the end of next year, with the rate peaking at 1.25 percent in mid-2024.
The survey, presented to policymakers at last week’s ECB meeting, was compiled before the ECB said that rates would rise by 25 basis points in July and possibly by a bigger margin in September.
The rate hike will come as the ECB fights to tame inflation, which is now seen back at the 2 percent target by the first quarter of 2024, according to the survey.
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