In addition, euro area exports are benefiting from the broad-based global expansion. The latest ECB staff projections put annual real GDP growth at 2.4% in 2018, 1.9% in 2019 and 1.7% in 2020. While recent data releases have overall been weaker than expected, risks to growth remain broadly balanced. Downside risks continue to be related primarily to global factors, including rising protectionism.
The latter may have already had some negative impact on global sentiment indicators. In this context, preserving free and open trade that is underpinned by multilateral cooperation is crucial to foster a favourable global economic environment. While headline inflation in the euro area has been somewhat volatile in recent months, this largely reflects the impact of base effects in energy and food inflation.