BIS Review 57/2010  1  In March 2010, euro area annual HICP inflation rose to 1.4%, from 0.9% in February, mainly driven by energy and unprocessed food price developments. Nevertheless, in view of the projected slow economic recovery and high unemployment, inflation is expected to remain moderate in 2010 and over the rest of the policy-relevant horizon.
Sectors that had borrowed on the basis of excessive growth expectations ran into difficulties. And it then takes a long time to recover from the crisis? Indeed. Everyone needs time to bring their balance sheet back into shape. Year after year, the ECB and the European Commission’s projections were far too optimistic. You always thought that things would be better in the coming year.