Within this sector, building and construction has expanded very strongly over the period, rising from about 10% of GNP in 1994 to 18% this year. Tighter monetary conditions in the euro area and a restoration of more sustainable growth rates would inevitably reduce the returns on investment. This could raise questions about the viability of some of this investment.
We expect continued strong growth in the second half of 2021, enabling euro area output to exceed its pre-pandemic level by the end of the year. This positive short-term outlook is reflected in the September ECB staff projections, which foresee annual real GDP growth at 5.0 per cent in 2021, 4.6 per cent in 2022 and 2.1 per cent in 2023.