2022-01-27-牛津经济研究院-Eurozone_Energy_tensions_will_keep_inflation_high_5页_247kb

Key Summary of Weekly Economic Briefing for Eurozone (28 Jan 2022):

• Energy Tensions and Inflation: The Russia-Ukraine conflict persists, sustaining high energy prices which account for about half of Eurozone inflation. This is expected to keep inflation elevated for several months, delaying any significant decline and increasing pressure on the ECB to possibly raise interest rates sooner.

• Economic Growth: The Eurozone economy slowed substantially in Q4 2021 but avoided contraction. For Q1 2022, a soft patch is anticipated due to the Omicron variant's impact, including reduced mobility and labor market disruptions, despite the variant being milder than previous waves. Overall, a recession is not expected.

• PMI Data: January PMIs indicate weak economic activity at the start of 2022, primarily driven by the Omicron wave. However, a rebound is projected as cases decline and restrictions ease, leading to gradual improvements in growth momentum from Q2 onwards.

• Political Developments: Portugal will hold snap elections this weekend, with close polling between the Socialist Party and Social Democrats, highlighting policy differences, especially on wage increases and business-friendly reforms.

• Upcoming Events: Early February data releases include preliminary GDP growth, inflation figures, and retail sales, which may confirm the current weak quarter and provide insights into inflation moderation and economic recovery pace.