This has enhanced the overall resilience of the euro area against possible economic and financial shocks. Thanks to significant fiscal consolidation efforts, fiscal deficits across euro area countries have been reduced (Figure 7). The European Commission expects deficits below 3% of GDP and positive primary surpluses in almost all euro area countries in 2018.
Very large money supply could result in inflation or higher prices which affect the common person the most. On the other hand, inadequate monetary resources can affect the growth and disrupt the payments system. RBI tries to strike a proper balance through its policies. Currency management is an important function.