Let me now explain our assessment in greater detail, starting with the economic analysis. Following a contraction of 0.2 percent, quarter on quarter, in the second quarter of 2012, euro area real GDP declined by 0.1 percent in the third quarter. Available statistics and survey indicators continue to signal further weakness in activity in the last quarter of the year, although more recently some indicators have stabilized at low levels and financial market confidence has improved further. Over the shorter term, weak activity is expected to extend into next year, reflecting the adverse impact on domestic expenditure of weak consumer and investor sentiment and subdued foreign demand. A gradual recovery should start later in 2013 as our accommodative monetary policy stance and significant improvement in financial market confidence work their way through to private domestic expenditure, and a strengthening of foreign demand should support export growth.This assessment is reflected in the December 2012 eurosystem staff macroeconomic projections for the euro area, which foresee annual real GDP growth in a range between -0.6 percent and -0.4 percent for 2012, between -0.9 percent and 0.3 percent for 2013 and between 0.2 percent and 2.2 percent for 2014. Compared with the September 2012 ECB staff macroeconomic projections, the ranges for 2012 and 2013 have been revised downwards.
ECB President Mario Draghi's Speech
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