In the monthly economic bulletin, ECB said the Governing Council expects a “further weakening” of economic activity “in the remainder of 2022 and the beginning of 2023”.
High inflation continues to “dampen spending and production” and severe disruptions in gas supply “have worsened the situation further”.
Additionally, “worsening terms of trade”, with imports prices rising faster than exports prices, are “weighing on incomes in the euro area”.
Risks to the economic growth outlook are “clearly on the downside, especially in the near term”. Risks to the inflation outlook are “primarily on the upside”.
ECB’s future policy rate decisions will continue to be “data dependent” and follow a “meeting-by-meeting approach”.
