The euro area economy has enjoyed 17 consecutive quarters of growth, and the latest data indicate continued momentum in the period ahead. The accommodative monetary policy stance is supporting domestic demand. Employment growth and the slight increase in employee compensation are supporting households’ disposable income. These, coupled with increasing household wealth, are benefiting private consumption.
The recovery in investment is supported by improvements in corporate profitability and the very favorable financing conditions. Buoyant foreign demand supports euro area exports, though the recent appreciation of the euro represents a source of uncertainty for the overall contribution of net trade to economic growth.