Despite continuing problems in financial markets, the latest economic data remain consistent with moderate but ongoing real GDP growth in the euro area. While growth is expected to moderate somewhat from its 2007 rate, euro area economic activity is still expected to continue to expand this year. However, the risks to this outlook would appear to be on the downside.
They arise from the significant uncertainty related to the problems that financial markets are experiencing and the risks surrounding the global growth outlook. For instance, the implications for growth stemming from developments in the United States remain highly uncertain. The full implications of financial market developments for the US economy, and subsequently for the global economy, may not be fully apparent yet.