European Economy. Quarterly report on the euro area 2003. No. III

Abstract

Editorial Following three years of low growth in the euro area, the first green shoots of recovery are appearing. Indeed, recent data have begun to send out encouraging signals suggesting that the trough of the cycle has been passed. The conditions for recovery during the second half of the year are falling into place, both on the domestic and the external side. Confidence is strengthening, monetary and financial conditions are accommodative, stock prices have rebounded significantly and inflation is expected to come down further. In the external environment, the global economy is gathering pace, with the US economy leading the recovery. Overall, upside and downside risks to the short-term growth outlook of the euro area are now much more balanced than a few months ago and activity should pick up gradually during the second half of the year.