The euro area economy is rapidly approaching its pre-crisis production level. After a strong increase in the second quarter, economic output remains 2.5 percent below the pre-crisis level of production. Sentiment indicators indicate quite an improvement both on firm and consumer side in summer compared to spring; and consumer-related mobility also points to another marked increase in private consumption and economic output during the third quarter. However, we expect the recovery to slow down markedly in the upcoming winter. Previous output losses have largely been caught up; and the pandemic is likely to continue to weigh on economic activity during the cold season. In addition, there are supply chain bottlenecks which slow down industrial production now and probably in the months ahead. Under the assumption that social and economic activity will fully normalize over the course of 2022, the recovery will likely gain grip again in spring 2022. Overall, we expect GDP in the Euro Area to grow by 5.1 percent in 2021, followed by 4.4 percent in 2022 and 2.4 percent in 2023. Due to temporary factors, consumer prices are expected to increase by 2.2 percent this year. Looking forward, price pressure is set to ease, with consumer prices increasing by 1.9 percent in 2022 and 1.7 percent in 2023, both below the inflation target of the ECB.