Consumption growth should gradually rise, broadly in line with expected developments in disposable income. Risks to this outlook for economic growth continue to lie on the downside and relate to high and volatile oil prices, concerns about global imbalances and the level of consumer confidence in the euro area, although the latter is improving.
Turning to price developments, annual HICP inflation was 2.2% in December, according to Eurostat’s flash estimate, compared with 2.3% in November and 2.5% in October. This decline was the result of some relaxation of earlier tensions in oil and petrol markets.