But Germany, the region’s largest economy, stagnated in the second quarter, official data showed on Friday.
Inflation continued to rise. Consumer prices in the euro zone rose to 8.9% in July, up slightly from the previous month, according to preliminary data from Eurostat.
Despite Friday’s data, a recession in Europe is still looming as it faces the prospect of a widespread energy crisis this winter.
The central bank is lagging peers like the Federal Reserve, which started climbing months ago. Interest rates in Europe have been negative since 2014, which means it is even further behind. And, if an energy shortage tips the region into recession, the central bank could be forced to halt rate hikes abruptly, hampering its ability to continue fighting inflation.
If a recession were to occur, inflation could subside without requiring much additional central bank intervention. But economists are hardly rooting for the outcome, which would also usher in a wave of job losses.
A survey of European fund managers by Bank of America released last week found that 86% of respondents expect a recession in the next year, down from 54% in June.
The chances of a recession in Europe rose earlier this week when Russia – historically its biggest energy supplier — cutting natural gas deliveries through a key pipeline.
The continent has been grappling with supply shortages for months amid an escalating economic dispute between Moscow and Brussels over the war in Ukraine.
Overall, the flow of Russian gas to Europe is less than a third of what it was this time last year, the European Commission said last week.
Europe has already managed to cut Russia’s share of its gas supply from 40% last year to just 20% in June, according to economic think tank Bruegel.
But if Moscow were to cut its exports to the bloc entirely, as it has done to several EU countries in recent months, many economies would tip into recession.
The International Monetary Fund said last week that a complete shutdown of Russian gas could reduce the GDP of Hungary, Slovakia and the Czech Republic – countries particularly dependent on Moscow’s exports – by up to 6%.