• Should monetary policy become even more aggressive than anticipated, a recession may be unavoidable. Inflation: While headline inflation has peaked and should decelerate progressively, core inflation will remain sticky and close to current levels for a few months, before declining slowly, although remaining above target.
• Eurozone: We see a cost-of-living-driven recession during the 2022-23 fall-winter season, followed by a shallow recovery, as price levels remain elevated. We expect the Eurozone economy to contract by -0.5% in 2023 and to recover to 1.3% in 2024 , with downside risks into the 2023-24 winter season. Inflation: We believe inflation has to peak yet, rising into double-digit territory in Q4 2022-Q1 2023 (September 9.9%) and decelerate towards 4.0% by Q4 2023, staying well above target over the forecasting horizon. The outlook remains highly uncertain as highlighted by recent geopolitical events.

You can now read the full whitepaper at the link below