Economic expansion in the euro area as a whole continues, albeit at a slower pace, and EU banks have become more resilient to financial shocks over the past two years, as reflected in the results of the EU-wide stress tests. Moreover, four additional Member States were admitted to EMU during the crisis years.
Private consumption remains resilient on the back of improved household sentiment and the wealth effect from the stock market rally. Business fixed investment is showing signs of picking up, in line with improved business sentiment and corporate profits. The year-on-year rate of change in the CPI has turned positive, reflecting both improvement in the economy and the yen’s depreciation. II.