Growth has increasingly been driven by domestic demand rather than net exports in the course of 1998. Private consumption, in particular, has been robust, supported by growth in employment. However, unemployment in the euro area remains very high (at 13.8 million) and is declining only gradually.
In the short term, output growth is expected to slow somewhat as a consequence of a weaker global environment. In addition to the lower real GDP growth figure in the third quarter, further evidence of an economic slowdown has been provided by survey data, most notably on order books and industrial confidence, which have weakened significantly since the spring of 1998.