Incoming data and sentiment indicators in the first quarter of this year suggest that the pace of growth may be gaining momentum. Nevertheless, the legacy of the financial crisis still determines today’s economic performance in many respects. Owing to a considerable amount of unutilised resources underlying inflation continues to lack a convincing upward trend.
Headline inflation has increased but that mostly reflects rising energy and food prices. The March flash estimate shows that headline inflation dropped to 1.5% from 2% in February and that underlying inflation decreased from 0.9% to 0.7%.