The sound fundamentals of the euro area economy – notably the healthy financial situation of the corporate sector and the strong labour market – bode well for a smooth absorption of the recent financial market turbulence. Global economic activity is expected to remain robust and to provide support for euro area exports and investment.
Consumption in the euro area should contribute to growth in line with developments in real disposable income, as employment conditions remain supportive. At the same time, risks to price stability remain on the upside. There is, nevertheless, a high margin of uncertainty surrounding this outlook and risks for the economy are on the downside.