The Eurozone is expected to avoid economic recession this year

The eurozone is expected to avoid recession this year, according to a widely followed survey of economists, illustrating the sharp turnaround in global economic sentiment over the past two weeks.

In December 2022, analysts polled by Consensus Economics predicted the bloc would sink into recession this year, but they expect the Eurozone to record growth of 0.1 percent in 2023. This is thanks to lower energy prices, government support and faster than expected reopening of the Chinese economy, which will affect the increase in global demand.

The improvement comes as officials and business leaders at this year's World Economic Forum in Davos also acknowledged the possibility of a more optimistic outlook and the IMF signaled it would soon upgrade its forecasts for global growth.

Economists feared that Europe would be among the hardest-hit areas of the world economy this year, due to its exposure to the economic fallout from Russia's war with Ukraine.

"There is now less than a 30 percent risk of a recession from the 90 percent that was estimated last summer," says Anna Titareva, economist at UBS.

Titareva emphasizes that the easing of disruptions in supply chains, the strong labor market and the surplus of savings are the reasons that explain the economic stability of the Eurozone.

The recent drop in wholesale gas prices, bringing them back to levels they were at before Russia's invasion of Ukraine, has also helped improve the economic outlook.

Bank JPMorgan raised its 2023 Eurozone GDP projections to 0.5 percent after forecasting natural gas prices to be around 76 euros per megawatt hour, instead of earlier expectations of 155 euros per MWh. /Telegraph/