Compared with the June 2014 Eurosystem staff macroeconomic projections, the projections for real GDP growth for 2014 and 2015 have been revised downwards and the projection for 2016 has been revised upwards. The Governing Council sees the risks surrounding the economic outlook for the euro area on the downside.
In particular, the loss in economic momentum may dampen private investment, and heightened geopolitical risks could have a further negative impact on business and consumer confidence. Another downside risk relates to insufficient structural reforms in euro area countries. According to Eurostat’s flash estimate, euro area annual HICP inflation was 0.3% in August 2014, after 0.4% in July.