JPMorgan predicts recession in eurozone

15:46 - 29.07.2022


July 29, Fineko/abc.az. The impending gas crisis in the eurozone and political problems in Italy will lead to mild recession and limit the increase in interest rates by the European Central Bank.

ABC.AZ reports that JPMorgan’s economists have lowered their forecast for the eurozone: they expect GDP growth to slow to 0.5% in the 3rd quarter, and then decline by 0.5% both in the 4th quarter of 2022 and in the 1st quarter of 2023.

"Our new forecasts assume gas prices at the level of 150 euro per MWh," JPMorgan’s economists wrote.

The price increase will lead to growth of core inflation by 1.2 p.p. in the near term, although it will decrease again in 2023 due to the negative reaction of the economy.

"We expect the ECB to raise the rate by another 50 basis points by the end of the year, compared with 75 basis points previously expected,” JPMorgan economists say.

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