On the external side, preliminary estimates for the fourth quarter of 2018 point to a pickup in net exports after a very weak third quarter. For these reasons, GDP growth in the euro area is expected to remain sound in the medium term.
Accordingly, our staff projections expect euro area GDP growth to reach 1.6% in 2020 and 1.5% in 2021, which is largely unchanged from the December forecast round. The risks surrounding euro area growth are still considered to be tilted to the downside, on account of the persistence of the uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.