In addition, with consumer confidence remaining at an all-time high and unemployment continuing to decline, the recent strength of private consumption should be sustained. Looking at the world economy, the upturn in growth has become more broadly based, pertaining to both industrial and emerging economies, and most forecasts indicate that current growth differentials between economic areas are in the course of narrowing.
Notwithstanding the strong growth performance and favourable outlook for euro area economic activity, the exchange rate of the euro has continued to decline over the past few weeks and has thereby moved further out of line with the increasingly positive economic fundamentals of the euro area, as well as international balance of payments positions.