As regards economic developments, since September last year the financial turmoil has intensified and broadened. Tensions have increasingly spilled over from the financial sector into the real economy. Looking ahead, both global demand and euro area demand are likely to remain dampened for a protracted period.
At the same time, declining inflation rates should support real disposable income in the period ahead, and the euro area economy should benefit from the broad and far-reaching policy measures that have been decided upon over recent weeks. However, this outlook remains surrounded by exceptionally high uncertainty. Overall, risks to economic growth remain clearly on the downside.