Following a fall in output equal to 0.1 percent in Q4 2022, the Euro Area economy shrunk by another 0.1 percent in Q1 2023, pushing the region into a technical recession at the start of 2023. Activity in Q2 likely picked up but only modestly as business activity growth, after months of acceleration, slowed towards the end of the quarter. Disinflationary trends are gathering pace across Europe. Headline inflation declined in May, as did core inflation, although less steeply. Assuming this trend continues, we estimate the ECB is approaching the end of its tightening cycle; most likely in July. All in all, with the Euro Area falling into a recession, although mild, we revise downwards our 2023 GDP growth forecasts, now expecting the region to grow by 0.6 percent in 2023, instead of 0.8, while growth for 2024 remains unchanged at 0.9 percent.