And we indicated that, in line with our base-case projection and our current assessment of risks, some modest further increase in the policy interest rate would be needed to keep aggregate supply and demand in balance and inflation on target over the medium term. It is important to keep in mind that there are, as always, both upside and downside risks to our projections.
In particular, without effective measures to raise labour supply and labour productivity growth, the potential economic growth rate of the euro area is set to decline. In order to support the potential economic growth of the euro area, to foster macroeconomic flexibility and dynamism, and to safeguard the future standard of living of our citizens, labour and product market reforms are urgently needed.