Financial conditions are favourable, but market volatility is on the rise. Economic developments in the euro area and Italy The euro area is struggling to re-establish satisfactory rates of growth and unemployment is still very high. While consumption has picked up somewhat, domestic demand has been held down by investment, which contracted in the second and third quarters of 2014.
The difficulties are widespread: average area-wide GDP growth is no higher than the modest rate recorded for the group of countries directly hit by the sovereign debt crisis. After a long series of unexpected drops in consumer price inflation, in December the twelvemonth variation was negative in eleven countries and, for the first time since October 2009, in the euro area as a whole.