The forecasting scenario for 2005-2006 remains one of inflation-free growth: annual GDP growth of 3 per cent in real terms and price inflation under 2 per cent in the OECD countries, and annual world trade growth of no less than 9 per cent. This essentially benign macroeconomic situation is accompanied by systemic financial stability.
To begin with, it is important to point out that the deposit facility rate has a specific, narrow meaning: under a negative DFR, banks that have more funds in their account with the ECB than what they need to fulfil their reserve requirement lose some money.