In the euro area, as shown in the chart on the bottom left on slide 6, although the 10-year bond yield has also declined below the 10-year nominal GDP growth expectations, the margin is substantially narrower. The low levels of bond yields can be partly explained by increasing demand by institutional investors, such as insurance companies and pension funds, for long-term bonds.
The euro area saving rate will normalise, but we do not expect extensive dissaving. [19] Even accounting for planned fiscal stimulus, slack in the economy is likely to remain large for some time.