2023 Europe Outlook: Milder Recession, Higher Terminal Rate

Goldmans Sachs Research economists maintain their long-held view that the energy crisis will push the European economy into recession this winter, as surveys and production data point to a sizeable slowing in energy-intensive industries, and high inflation will reduce real household incomes. But they now see a shallower recession as the hard data have remained surprisingly resilient, the rebalancing of the gas market has reduced the risk of energy rationing and governments have provided significant fiscal support.