versus 6. 9 % according to imf direction of trade statistics data. notice that in order to account for competition faced by euro area companies in foreign markets from exporters based in third countries the weight of the renminbi in the euro effective exchange rate departs from the direct bilateral export linkages. in the case of china, the “ double ” export weight amounts to 16 % compared to a direct export weight of 7 %, over the period 2010 – 12 ( see ecb economic bulletin 6, 2015 ). bis central bankers ’ speeches financial assets held by euro area residents. 19 and finally, a slowdown in china ’ s domestic demand lowers global commodity prices, which acts as a stimulus to commodity importers like the euro area. 20 having said that, the ecb is carefully monitoring events in emerging economies, as their effect on the rest of the world might turn out to be larger if mutuallyreinforcing neighbourhood effects materialise. 21 coping with monetary policy spillovers to cut a long story short, the global economy has become more vulnerable than ever before to very large real and financial spillovers. global factors drive asset prices and cross - border flows. and in some cases, the ability of domestic monetary policy to achieve its mandate might be more limited than we used to think, in particular in emerging economies. what measures should be taken to manage the risks associated with the rise in global financial integration while not forsaking its benefits? one influential view in policy circles, close to being the conventional wisdom until some time ago, is that “ putting your own house in order ” is the main and best line of defence against external influences. another view, that is rapidly gaining ground, surmises instead that global problems also require global solutions. the first view seems to find some support in the fact that while recent bouts of financial market volatility typically occurred in response to global shocks, not all economies were affected to the same extent. this is consistent with evidence suggesting that global push factors explain capital surges in general but domestic pull factors determine in which country they end up. 22 unfortunately, the debate about precisely which fundamentals mitigate economies ’ vulnerability to abrupt capital flows episodes is not settled. some studies find that emerging economies with better institutions were less affected by unconventional monetary policy measures in advanced economies, for example. other evidence suggests that countries that had allowed their current accounts to run into large deficits and their exchange rates to substantively appreciate displayed larger capital flow volatility during

labour market, which will underpin consumer spending. however, activity levels will be dampened as the policy tightening and adverse credit supply conditions increasingly feed through to the real economy. the expected gradual withdrawal of fiscal support is also likely to weigh on economic growth in the coming quarters. the labour market has so far remained resilient despite the slowing economy but shows signs of losing momentum. the unemployment rate remained at its historical low of 6. 4 per cent in july. while employment grew by 0. 2 per cent in the second quarter, the latest survey data on employment growth came close to stalling. this indicates that employers have become more reluctant to hire in the face of deteriorating demand and gloomier prospects for the year ahead. in addition, strong labour demand has begun to moderate, with indicators of job vacancy rates edging down in recent months. these developments are reflected in significant downward revisions for output growth in the september staff projections : annual average output growth is now projected at 0. 7 2 / 6 bis - central bankers'speeches per cent in 2023, 1. 0 per cent in 2024 and 1. 5 per cent in 2025. in terms of the quarterly profile, most of the markdown in activity is for 2023, with carry - over effects from this year accounting for much of the downward revision to the 2024 growth outlook. the risks to economic growth are tilted to the downside. economic growth could be slower if the effects of monetary policy are more forceful than expected or if the world economy weakens owing, for instance, to a further slowdown in china. that said, growth could be higher than projected if the strong labour market, rising real incomes and receding uncertainty mean that people and businesses become more confident and spend more. monetary policy transmission turning to our monetary policy, we have raised our policy rate by a cumulative 450 basis points over the last ten governing council meetings. the reimbursements of the third series of our targeted longer - term refinancing operations ( tltro iii ) that have taken place so far and the slowdown and subsequent discontinuation of reinvestments under the asset purchase programme ( app ) have reduced our balance sheet by €1. 6 trillion and €109 billion respectively. by pushing up term premia and draining liquidity from the banking system, these ancillary policies are also contributing to the tightening in financing conditions, even if rate increases are the primary tool for adjusting our monetary policy stance.