Despite these developments, the euro area economy continued to expand at solid rates in 2007, with annual real GDP growing by 2.7%. In the first half of 2008, moderate ongoing growth in real GDP has continued, although the quarter-on-quarter profile is likely to show significant volatility, owing to temporary, in part weather-related, factors.
It is thus important to focus on the medium-term trend when assessing growth developments. Looking ahead, on the external side, growth in emerging countries should remain robust, supporting euro area foreign demand. On the domestic side, the economic fundamentals of the euro area remain sound and the euro area does not suffer from major imbalances.