Real GDP in the euro area has expanded for 17 consecutive quarters, growing by 2.3% year on year during the second quarter of 2017, according to Eurostat – a rate that surpassed our projection at the start of the year.
This compares with the latest potential growth estimates for the euro area of just over 1%.1 The latest survey data point to a strong third quarter. The composite output Purchasing Managers’ Index – which is highly correlated with growth in the euro area – is above its long-term average and remains close to six-year highs.