HSBC is expecting the eurozone economy to grow 0.6% in 2023 from its previous estimate of being flat, citing easing supply chain issues, falling wholesale energy costs and a likely slowdown in inflation.

The recent turmoil in the banking sector may trigger a slowdown later this year as financial conditions tighten, the bank said in a note on Thursday.

It, however, cut its eurozone growth forecast for 2024 to 0.7% from 0.8% expected earlier, well below the ECB's forecast of 1.6%.

The bank no longer sees a recession in the UK as inflation cools, prompting it to raise its growth forecast to 0.4% for the year from an estimated 0.6% drop three months ago.

(Reporting by Roshan Abraham in Bengaluru; Editing by Anil D'Silva)