According to Eurostat’s flash estimate, quarter-on-quarter real GDP growth in the euro area was 0.3% in the fourth quarter of 2005. This was considerably lower than the strong 0.6% recorded in the previous quarter. However, looking through the short-term volatility and assessing recent economic indicators and survey information, the evidence suggests that economic activity is improving.
Accordingly, we should see stronger growth rates over the short term, as also reflected in various indicator-based estimates. Looking further ahead, the conditions remain in place for ongoing economic expansion in the euro area. The external environment remains favourable, providing support for euro area exports.