The European economy today is performing better than expected, despite record inflation and the energy crisis, said Mario Centeno, head of Portugal’s central bank and a member of the European Central Bank’s (ECB) Governing Council. This is positive news for the euro.

“European economy 2023 surprises us quarter after quarter,” he said during an event at the World Economic Forum in Davos organized by Bloomberg.

“The fourth quarter in Europe is likely to be positive as well. We may also get a surprise in the first half of the year,” Centeno added.

Some analysts are also showing increased optimism about the eurozone economy. For instance, a week ago, Goldman Sachs (NYSE:GS) improved its forecast for the currency bloc’s GDP for 2023 and now expects growth of 0.6% instead of the 0.1% decline previously expected.

In the meantime, the ECB will continue its fight against inflation, Centeno noted.

That fight lies in the sharpest key interest rate hike in the regulator’s history. The rate is now at 2 percent, and analysts polled by Bloomberg expect two 50-basis-point hikes, in February and March, and another 25-basis-point hike in May or June.

Earlier, we reported that inflation slowed to 9.2% in the eurozone in December and 10.4% in the EU.