The fastest stage of growth in the euro area looks to have passed, but momentum remains strong. Uncertainty is being fuelled by protectionism and Italy’s domestic economic policy.

In times of uncertainty, prudence is justified in the normalisation of monetary policy.

Open and transparent communication is a win-win situation for monetary policy. It helps the private sector make better economic decisions and allows the central bank to achieve its price stability objective more efficiently.

Global demand, improved competitiveness and favourable financing conditions will support growth. GDP growth forecasts for 2018–2020 stand at 2,9%, 2,2%, and 1,7%. Inflation will remain close to 1% over the years 2018–2019 before gathering pace and reaching 1.5% in 2020.

The period 2004 - 2017 under review was particularly challenging for forecasting.

Euro area inflation has been slow in recent years. The way slow inflation was explained before the crisis has been challenged.

The favourable outlook for the global economy is overshadowed by the threat of protectionism. In the euro area growth has picked up. Some of this acceleration is on a sustainable basis, but long-term growth is likely to remain slower than pre-crisis growth.

Euro area inflation remains subdued, but confidence in inflation converging towards the ECB's objective has strengthened. Owing to these uncertainties, the conduct of monetary policy in the euro area rests on patience, persistence and prudence.