In our Outlook Report published in April, we pointed out that the shape of the Phillips curve may change along with changes in inflation expectations or labor cost restraint by firms.
At the same time, medium and long-term inflation expectations remained firmly anchored at levels consistent with our aim of keeping inflation rates below, but close to, 2% in the medium term. Monetary and, in particular, credit dynamics remained subdued throughout the year. M3 growth was 2.4%, compared with 3.1% in 2012, but declined throughout the year to the low level of 1% in December.