(Bloomberg) -- Euro-zone inflation probably slowed marginally just after the economy either stalled or even contracted, according to forecasts for crucial data before next week’s interest-rate decision.

The headline pace of consumer-price growth fell for a third month in January to 9%, the median of 32 predictions in a Bloomberg survey show for that release on Wednesday.

A day earlier, the first estimate of gross domestic product for the final quarter of 2022 will be published, a report that has left economists evenly split on the outcome. Half of forecasts show stagnation or growth, while the rest anticipate a drop in output.

Those data will inform European Central Bank policymakers, whose first meeting of 2023 will conclude on Thursday, the day after the US Federal Reserve does the same.

Euro-zone officials normally use forecasts of future inflation and growth to guide their rate hiking. But several have also hinged recent decisions on the latest monthly outcomes for consumer prices, bringing greater significance to such releases.

With inflation still “way too high,” in the words of President Christine Lagarde, the ECB will almost certainly raise the deposit rate by a half point this week to continue the most aggressive monetary tightening in its history. 

When she addresses reporters afterwards, focus is likely to fall on whether a repeat of that move or a smaller hike is in prospect for March. She is insisting that the ECB will “stay the course” to get inflation down to the 2% goal.

Hawkish officials emphasize that the so-called core measure showing underlying price pressures remains stubbornly elevated too. It will fall only slightly to 5.1%, according to estimates of economists.

Complicating the job of forecasters is a re-weighting of the euro-zone inflation basket this month, and the evolution of different energy-price regimes throughout the region. 

That may augur contrasting outcomes in concurrent national data this week. Inflation in Germany and France is predicted by economists to have accelerated, while they reckon it will have slowed in Italy and Spain.

The mild improvement predicted for overall consumer prices may therefore offer limited comfort to officials, though a stagnating economy — if that does transpire — would at least be an improvement on what they were formerly predicting. 

Lagarde herself said on Jan. 19 that just a “small contraction” is now likelier than the recession she and her colleagues had appeared to accept as inevitable.

Central to that rosier outcome is Germany’s performance. Chancellor Olaf Scholz said in an interview this month that he’s “absolutely convinced” the region’s biggest economy will avoid a recession this year. 

The first full estimate of German fourth-quarter growth will be released on Monday, kicking off a busy week for investors focusing on the region. The median forecast there is for stagnation.

That’s also the outcome anticipated by economists for France’s GDP number due on Tuesday. By contrast, Italy’s release will show a decline in output, according to their predictions.

--With assistance from Alexander Weber and Andrew Langley.

©2023 Bloomberg L.P.