Similar rates have prevailed for most of this year and this inertia of inflation rates at around 2% is likely to continue in the coming months. Due to adverse food price developments, the evolution of oil prices and planned increases in indirect taxes and administered prices, inflation rates will fall neither as quickly nor as strongly as was expected earlier in the year.
However, when assessing price trends over the medium term, a number of factors should dampen inflationary pressures. First, given the past appreciation of the euro, import prices should contribute to this effect. Second, domestic cost pressures should remain moderate. In particular, wage growth should be contained in the context of a recovery which, for the time being, is expected to remain gradual.