Accordingly, a number of other variables were also analysed in deciding upon the appropriate monetary policy stance. These included the pace of growth in the banking sector’s credit extension, movements in consumer price and production price inflation, domestic production and expenditure, the balance of payments and exchange rate situation, and the fiscal policy stance.
Pursuant to this mandate, the Governing Council’s objective is to keep inflation rates below, but close to, 2% over the medium term. The ECB has accomplished its mission over the past 12 years. During this period, the average annual inflation rate stood at 1.97% in the euro area. It is important to grasp the significance of this achievement.