Looking ahead, the most recent eurosystem staff projections, published in December, show a decline in the outlook for the Euro Area, with more persistent inflation and weaker growth.
The Euro Area has faced a number of inflationary shocks in the past two years, from pandemic-related supply chain disruptions as well as strong demand once restrictions were lifted, to sharp rises in energy and food prices due to the Russia's aggression. Inflation was 9.2 per cent in December 2022, down from 10.1 per cent in November, mainly due to falling energy costs.