Recession risk remains low despite a tougher external environment, which will remain a defining feature for the growth outlook in the coming years. Expansionary fiscal policies and rising wages should support domestic demand.
Many fragilities are lingering in the background and labour market resilience is an important precondition for the expansion to continue.
Underlying inflation pressures continue to build, supporting a gradual uptrend.
We expect no ECB policy rate changes until the end of 2021.
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