Although the euro area economy remains in a deep contraction, consumer and business confidence indicators improved in May. At the same time, there has been an improvement in forward-looking indicators, despite remaining well below their pre-crisis levels, suggesting that firms expect a recovery to take hold in the coming months.
This assessment is also consistent with the June 2020 Eurosystem staff macroeconomic projections for the euro area. After the further severe contraction in the second quarter, real GDP growth is projected to rebound in the second half of the year, with an average growth rate of –8.7 percent in 2020.