Although output growth accelerated in Q2 for the Euro Area, business activity indicators suggest Q3 started on a very weak footing. On the monetary policy front, the European Central Bank announced a higher-than-expected rate hike of 50 basis points, from -0.5 to 0 percent, to counteract high inflation. All in all, given stronger than expected first half, 2022 forecasts have been revised upwards. But as headwinds continue, we have lowered our 2023 GDP growth estimates, assuming a technical recession will happen starting later this year.