The euro area economy is recovering rapidly, thanks to high vaccination levels and continued forceful policy support . After falling by about 6½ percent in 2020, euro area output has rebounded strongly since the second quarter of 2021. While the flash Q3 GDP estimate came in slightly stronger than expected in our October 2021 World Economic Outlook baseline, the fourth quarter looks weaker given growing supply pressures, elevated energy prices, and, more recently, the reintroduction of mobility restrictions in several countries due to a new wave of infections. Taken together, these factors suggest the possibility of ... (full story)