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Macro and financial environment

Despite global downturn, the euro area remained resilient in 2019.

The re-emergence of trade tensions between the US and China and the Brexit negotiations heightened global uncertainty, weighing on global growth and exports. Developments in the manufacturing-auto industry sector further dampened the euro area’s economic activity.

In contrast, domestic demand remained solid, supported by favourable financing conditions, low inflation, and dynamic labour markets.

In early 2020, euro area economic activity deteriorated sharply, hit by the adverse effects of the Covid-19 pandemic. Uncertainty about the duration and magnitude of the shock and the timing and speed of the subsequent recovery remains high.

Member states have taken urgent containment measures together with actions to support citizens and businesses, including discretionary stimulus and coordinated action.

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Macro and financial environment