The weakness in China and emerging markets means we are looking for the weakest euro area GDP growth in five quarters in Q3 15.
The biggest impact is expected from lower investments, as a spill-over to sentiment is likely to result in a continued cautious stance among businesses.
The slowdown in the Chinese manufacturing sector is a headwind to exports but with Chinese GDP growth still running around 6% it is not a game changer.
Exporters benefit less from a weaker effective euro as the Chinese FX reform has resulted in a yuan depreciation.
Private consumption is on the other hand again supported by the decline in oil and gasoline prices, but the impact should be more muted than at end-2014.
The unemployment rate is still approaching its high structural level despite the weaker growth outlook. This follows as potential growth is very low.
Fiscal policy should be a small tailwind to activity after a long period where a number of countries implemented significant austerity measures.
Credit conditions continue to improve and there is a small risk of a positive growth surprise as the strengthened bank lending is a new tailwind to activity.
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