While the recovery is expected to initially proceed at a gradual pace, euro area real GDP growth rates should again be in line with potential growth later this year. These expectations for a rebound in real GDP growth in the euro area are shared by recently published forecasts of international organisations, which all paint a similar picture.
In the near term, uncertain labour market prospects might also continue to constrain household spending. Indeed, while the recession may have ended in terms of GDP contraction, we should bear in mind that employment growth typically lags business cycle fluctuations. Moreover, there are reasons for believing that such lags may be more pronounced in the current context.