According to the latest estimates, growth in the euro area was 2.8% in 2006 almost double the growth rate recorded in 2005. The economic recovery was mainly driven by aggregate demand – both domestic and international. Private investment – both business and residential – rose strongly and private consumption growth also strengthened.
Gross exports increased substantially and played an important role in stimulating domestic demand, but the contribution of net exports to GDP growth in the euro area as a whole was marginal, as imports also rose at a fast pace. On the supply side, there were positive signs of structural improvements in the labour market and these are reflected in a further rise in employment.