ECB Economic Bulletin: incoming information about Eurozone activity has surprised on the downside

The persistence of uncertainties relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment.

Supportive financing conditions, favourable labour market dynamics and rising wage growth continue to underpin the euro area expansion and gradually rising inflation pressures.

Significant monetary policy stimulus remains essential to support the further build-up of domestic price pressures and headline inflation developments over the medium term.

The global economic growth momentum has slowed recently amid geopolitical uncertainties and vulnerabilities in emerging markets.

Global trade decelerated towards the end of 2018 as downside risks related to unresolved trade disputes remained prominent and growth in emerging markets slowed down.

While financial conditions are favourable overall, the weaker global growth momentum has fuelled stock market volatility.

A more accommodative monetary policy stance has been taken in China in the light of the slowing growth momentum.

Euro area real GDP increased by 0.2%, quarter on quarter, in the third quarter of 2018, following growth of 0.4% in the previous two quarters.

Incoming data have continued to be weaker than expected resulting from a slowdown in external demand which was compounded by several country and sector-specific factors.

While the impact of some of these factors is expected to fade, the near-term growth momentum is likely to be weaker than previously anticipated.

Looking ahead, the euro area expansion will continue to be supported by favourable financing conditions, further employment