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A resilient European economy
EU GDP: annual growth rate and cumulative change, 2008-18
-7
-5
-3
-1
1
3
5
7
9
08 09 10 11 12 13 14 15 16 17 18
Cumulative change since 2008-Q1
Annual GDP growth rate
%
forecast
Economic and financial
crisis
Interim recoveryEuro area recession
Current recovery
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Key factors surrounding the outlook
Positive factors
Negative factors
IMPROVING LABOUR MARKET
SUPPORTIVE ECONOMIC POLICIES
STRONGER GLOBAL
ECONOMY
NORMALISING INFLATION
STILL SLOW GROWTH OF INVESTMENT
HIGH LEVELS OF
UNCERTAINTY
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Improved global growth prospects
3.9 3.73.3 3.2
3.73.9
-0.5
0.00.51.01.52.02.53.0
3.54.0
4.5
13 14 15 16 17 18
pps.
Advanced economies excluding EU China
Emerging Asia excluding China CIS and Latin America
MENA, SSA and other emerging markets World excluding EU (y-o-y%)
forecast
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Economic policies remain supportive
Budgetary developments, euro area
-4
-3
-2
-1
0
1
2
-4
-3
-2
-1
0
1
2
12 13 14 15 16 17 18
General goverment balance (lhs)
Change in the structural balance (rhs)
forecast
% of GDP pps. of pot. GDP
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Economic policies remain supportive
Composite credit cost indicators, euro area
0
1
2
3
4
5
6
08 09 10 11 12 13 14 15 16Households Non-financial corporations
Sources: ECB, Bloomberg, own calculations
Last observation: December 2016
%
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Economic growth 2017
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More jobs to be created - but not yet enough
Employment and unemployment, euro area
-3
-2
-1
0
1
2
3
4
5
6
08 09 10 11 12 13 14 15 16 17 18Cumulative change during periods of increase and decrease
Cumulative change since 2008-Q1
pps.
forecast
‘Great Recession’Interim recovery Euro area
recessionCurrent recovery
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More jobs to be created - but not yet enough
0
5
10
15
20
25
30
Base year: 2008 Difference with peak 2016Q3
%
Labour market indicators, euro area
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Investment still lacks strong momentum
-20
-15
-10
-5
0
5
10
15
20
08 09 10 11 12 13 14 15 16 17 18
Cumulative change during expansion and contraction phases
Cumulative change since 2008-Q1
%
‘Great Recession’Interim recovery
Euro area recession
Current recovery
forecast
Investment (2008-2018), euro area
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Energy prices temporarily driving inflation up
-2
-1
0
1
2
3
09 10 11 12 13 14 15 16 17 18
y-o-y %
Other components (core inflation) (pps.)
Energy and unprocessed food (pps.)
HICP, all items
forecast
Inflation breakdown, euro area
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Budgetary outlook 2017
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Greece outperformed forecasts and targets 2015 and 2016
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2015 2016 2017 2018
EC AF 2015 EC AF 2016 EC WF 2017
y-o-y % change
Real GDP
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Greece outperformed forecasts and targets 2015 and 2016
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2015 2016 2017 2018
EC AF 2015 EC AF 2016 EC WF 2017
% of GDP
Primary balance
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Downside risks have increased
(-) US fiscal and trade policy (short-term vs medium-term)
(-) Monetary policy divergences
(-) Global risk re-assessment
(-) Impact of the UK 'Leave' vote
(-) Political uncertainty
(-) Banking sector
(-) Geopolitical tensions
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Downside risks have increased
-5
-4
-3
-2
-1
0
1
2
3
4
5
09 10 11 12 13 14 15 16 17 18
%
upper 90% upper 70% upper 40%
lower 40% lower 70% lower 90%
central scenario actual
Fan chart, euro area