In the context of moderate economic growth , this trend should continue .

Private consumption growth is also expected to be subdued .

view of the deterioration of the labour market and the fall in inflation . Looking ahead , wage growth is projected to remain moderate .

This assessment was confirmed by the relatively moderate growth of credit in 2002 .

Labour productivity growth remained subdued in 2005 ( see Chart 31 ) .

Government consumption is expected to grow moderately over the projection horizon .

Against this background , growth in unit labour costs has been moderate since 1994 .

Looking further ahead , the conditions remain in place for moderate economic growth to continue .

Incoming macroeconomic data point to moderating but ongoing real GDP growth .

According to the assessment of banks , as explained in the Eurosystem 's bank lending survey , financing needs related to real economic activity namely for inventories , working capital and fixed capital investments have gradually increased in importance in explaining the continued strengthening of loan demand in the euro area in 2006 .

The growth in nominal compensation per employee is assumed to remain moderate over the horizon .

Private consumption growth is also expected to be subdued in the period ahead .

Growth in nominal compensation per employee is assumed to remain moderate over the horizon .

Government consumption is expected to grow moderately over the projection horizon .

Incoming macroeconomic data continue to point to moderate but ongoing real GDP growth .

As regards the domestic contribution to growth , growth in private consumption continued to be subdued in 2005 ( see Table 3 ) . This was partly a result of low increases in real disposable income , reflecting restrained growth in nominal income and the rise in energy prices .

The lower than expected performance in 2005 , continuing the moderate growth in economic activity observed since mid 2004 , reflected oil price strength , the lagged effects of the appreciation of the euro in 2004 and a temporary slowdown in global demand in the first half of 2005 .

The estimated budgetary outcome for 2005 reflected some fiscal tightening in an environment of moderate economic growth .

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Second , the growth in nominal compensation per employee is assumed to remain moderate over the horizon .

Components of M3 ( annual percentage changes ) currency in circulation overnight deposits other short term deposits marketable instruments 20 20

Wage increases remain contained , against the background of ongoing moderate economic growth and weak labour markets .

Looking through the volatility in monthly data , loan growth continues to be very subdued .

The annual growth rate of debt financing of non financial corporations recovered somewhat in the first half of 2003 , mainly in connection with short term debt financing growth . By contrast , in the second half of the year the annual growth rate of debt financing of non

While real GDP growth was somewhat subdued between 2001 and 2003 , it has picked up again since 2004 .

Consumer price inflation remained subdued in Japan in 2007 , reflecting in particular subdued wage growth .

This reflected increased fiscal borrowing needs against the background of persistently subdued economic growth in the euro area . The annual growth rate of short

Subdued growth in labour costs , combined with high oil prices , contributed to restraining underlying growth in real disposable income in the second half of 2004 .

Indeed , the euro area economy rebounded in 2006 after a prolonged period of subdued growth , which had begun in 2001 .

Second , the growth in nominal compensation per employee is assumed to remain moderate over the horizon .

However , loan dynamics did not seem particularly weak given the environment of subdued economic growth and high economic uncertainty . Therefore , the data on growth in loans did not seem to point to any widespread credit constraints in the euro area .

Notwithstanding a tightening of labour market conditions , growth in compensation per employee was moderate in 1994 96 .

Demand pressure was weak and wage growth was moderate , and particularly in the course of 1994 substantial productivity gains could be achieved .

Once those partly temporary factors reverse , in early 2010 , GDP growth is expected to moderate again .

Starting with the economic analysis , recent indicators of economic activity in the euro area have , on balance , confirmed that growth has remained subdued .

Looking ahead , the Governing Council expects the euro area economy to grow at a moderate pace in 2010 .

Global economic growth has become more balanced across regions and , while moderating somewhat in recent quarters , remains strong .

Monetary and credit expansion is due partly to the moderate level of interest rates and solid economic growth .

The latest information on economic activity also underpins previous expectations of moderate but ongoing growth in the first quarter of 2008 .

As regards the external environment , global economic growth has become more balanced across regions and , while moderating somewhat , remains robust .

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Cuts in employers social security contributions in conjunction with strong growth in labour productivity have contributed to the subdued rise in unit labour costs

Turning to the monetary analysis , the annual growth rate of M3 remains robust , even though it moderated further in December .

Considering first the economic analysis , the latest information on economic activity confirms the picture of moderating growth around the turn of the year .

However , despite a tightening of labour market conditions , wage growth has remained moderate , notwithstanding a slight acceleration in 1997 , and increases in unit labour costs have been low .