Real GDP in the euro area expanded in the last two quarters: From July to September, it grew by 0.1% – quarter on quarter – following 0.3% in the second quarter of this year. Developments in survey-based confidence indicators up to November point toward a modest growth rate also in the last quarter of the year. At the same time, unemployment remains high.
Necessary balance sheet adjustments in financial and non-financial sectors continue to weigh on economic activity. Looking further ahead, we expect output to continue to recover at a slow pace. This is in particular due to some improvement in domestic demand supported by our accommodative monetary policy. Euro area activity should, in addition, benefit from a gradual strengthening of demand for exports.