Quarterly output growth in the Euro Area accelerated, increasing by 0.6 percent in Q1 2022. Consumer confidence remained subdued in May, while business activity improved further although at a slower pace. The big news this month comes from the inflation front, as overall annual inflation reached 8.1 percent, thus prompting the European Central Bank to get ready for its first rate hike after eleven years. All in all, despite the headwinds still lingering above Europe, a solid labor market, resilient business confidence and an upbeat investment outlook will drive the region’s growth in 2022. As for 2023, a possible recession in the US early next year has prompted us to revise downwards the Euro Area’s output growth from 1.4 to 1.2 percent.