European Economy. Quarterly report on the euro area 2004.

Abstract

Following the positive growth surprise in the first quarter of this year, the recovery of the euro area has pursued its course. The economy has actually expanded slightly faster than expected during the first half of the year, with growth accelerating towards potential, and should continue to expand at a similar pace throughout the rest of the year. While the higher growth prospects are of course welcome, there are no grounds for complacency. The recovery still looks relatively timid and unless growth accelerates further it would take a long time for the negative output gap to be closed and for employment creation to accelerate.