By 2060, the population will have shrunk by up to 20% and the labour force by around 30%. To make matters worse, policy measures such as early retirement on a full pension at 63 are already constraining the labour supply, thereby eroding growth opportunities. 6.
In the Governing Council’s assessment, the risks to this economic outlook are broadly balanced in a context of elevated uncertainty. On the one hand, global trade may continue to grow more rapidly than expected, thereby supporting euro area exports. Moreover, strong business confidence could provide more support to domestic economic activity in the euro area than is currently expected.