European Economy. Quarterly report on the euro area 2006.

Abstract

The euro-area recovery remains on track. The interim forecast recently published by the European Commission expects GDP growth to accelerate to 1.9% in 2006. This forecast is based on both a positive outlook for exports and – more significantly – on a progressive firming of domestic demand. The outlook for exports is positive partly because of improved cost competitiveness of the euro area, but also, and more importantly, because world trade is expected to continue to expand rapidly. This reflects high expected growth rates in major countries and regions such as China, Japan, the United States, Latin America and oil-exporting countries.