Resilient eurozone economy seen avoiding recession this year

ECB officials say monetary policy must be tightened further to tackle underlying price growth

GDP is now expected to increase 0.6% this year, compared with an earlier forecast for a contraction of 0.1%. Picture: Larry Cummins

Economists at Goldman Sachs no longer predict a eurozone recession after the economy proved more resilient at the end of 2022, natural gas prices fell sharply, and China abandoned Covid-19 restrictions earlier than anticipated.

GDP is now expected to increase 0.6% this year, compared with an earlier forecast for a contraction of 0.1%. While growth will still be weak during the winter due to the energy crisis, the first quarter of 2023 will likely see expansion of 0.1%, according to economists led by Jari Stehn.