I say “appear”, because policymakers should be humble in their pronouncements.2 Estimates of the degree of slack in the economy vary widely and are often revised. Model outputs, however complex they may be, should be treated with due caution, and judgement based on experience remains an essential part of the policymaking process.
This has also been reflected in the weakening of industrial confidence in recent months. Despite these external influences, there is no reason for pessimism about the euro area economy. Consumer confidence has remained high, and the ongoing employment growth, the reductions in direct taxes and the lower oil prices, foster expectations for a continued strong growth in private consumption.