The prospects for economic growth The latest data and survey indicators point to a substantial decline of real GDP in the fourth quarter of 2008 and to a continued weakness in economic activity in the euro area in the first half of this year. Confidence is at historically low levels, world trade has sharply declined and financing conditions remain tight.
All these factors are adversely affecting aggregate demand. Recently, some survey indicators showed signs of stabilisation. It is too early to declare that we may be reaching the bottom of the downturn on the basis of these signals. Other indicators point to a less encouraging, if not gloomier, outlook.