Following hiccups in Q1 due to Omicron, the region's economy is back on track for another year of above-trend growth

Amid the fast spread of the Omicron variant, economic activity decelerated in the Euro Area in January. The services sector took the strongest hit, while industrial output picked up as supply bottlenecks eased and export growth increased. In Q4 2021, Germany disappointed, being the only economy among the four largest ones to have registered a negative growth rate on a quarterly basis. On the contrary, France was the first one to have exceeded its pre-pandemic size. Overall, despite hiccups in the German economy, the Euro Area has entered the new year on a stronger than expected footing, with economic growth projected to remain strong and above-trend at 3.8 percent in 2022.