(Bloomberg) -- The euro-region economy stalled or even contracted in the third quarter under the cumulative weight of successive interest-rate hikes, according to forecasters.

All but four of the 29 economists surveyed by Bloomberg predict data on Tuesday to show gross domestic product either stagnated or shrank after only a brief spurt of expansion during the three months through June. A separate report is seen likely to reveal noticeably weaker inflation in October.

European Central Bank President Christine Lagarde warned this month that an unprecedented tightening in financial conditions is taking hold after 10 rate increases. She is said to have told European Union chiefs earlier this week that the economy is likely to face stagnation in successive quarters.

That’s relatively optimistic compared with the projections of economists at Barclays, who reckon the region could be in recession.

“Monetary tightening is being transmitted quite forcefully, and we’ve not yet seen the peak of it,” Silvia Ardagna, the UK bank’s head of European economics research, told Bloomberg Television on Wednesday. “We think that core inflation and headline inflation will get back to 2% sooner than the ECB forecast, and that’s because we have much weaker economic activity forecasts.”

It’s Germany — whose GDP data come out on Monday, along with Austria and Belgium — that economists reckon weighed down the euro zone most severely during the third quarter. The next day, France and Italy will release numbers that may show they eked out marginal expansion.

Initial reports from elsewhere in the region on Friday were mixed: Spain sustained growth during the quarter but Ireland’s economy noticeably shrank.

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“With growth momentum ebbing and risks stacked to the downside, the chances of another rate hike this year are now very low.”

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If the euro-zone number turns out to show contraction — as predicted in Bloomberg’s Nowcast — that would be the first such drop in GDP since the pandemic struck in 2020. An outcome of stagnation would confirm that the economy has grown in only one quarter out of the past four. 

Next week’s reports may still offer some encouragement to ECB policymakers, with the prospect of markedly slowing inflation. The headline number is expected to come in at 3.1%, an outcome no longer so far from their 2% goal. Core price growth, stripping out volatile elements such as energy, is faster, seen at 4.2% in October. 

War in the Middle East is becoming an increasing concern to officials, both from the perspective of inflation and growth.

“We are very attentive to the economic consequences that that could have, whether in terms of direct or indirect impact on energy prices, or the level of confidence that economic actors will continue to display,” Lagarde said on Thursday. 

--With assistance from Dani Burger.

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