Business confidence in the Euro Area remained elevated in March. Improvements in the COVID-19 situation were translated into solid gains in services activity, while renewed supply chain issues due to the war in Ukraine resulted in a decline in manufacturing sentiment. Amid historically high inflation, driven by soaring energy prices, and muted wage growth rates, it is European consumers’ confidence what plunged in March. Looking forward, we leave our GDP growth projections for the Euro Area unchanged at 2.8 percent for 2022, in line with the significant downgrades we did a month ago.