Morgan Stanley economists pointed out that the Eurozone may enter a moderate recession due to energy supplies.
Morgan Stanley economists stated that they expect a mild recession in the euro area in the fourth quarter with the decrease in energy supplies from Russia.
Economists had revised their forecasts with persistent high inflation.
In the report released on Wednesday, economists noted that the economy will contract over the next two quarters and will grow again in the second half of next year with increased investments. Economists, who stated that the risks intensified, said that the European Central Bank might stop the increases in September if the outlook improves. However, they emphasized that with the high inflation experienced, they expect the bank to increase interest rates by 75 basis points at each meeting this year.