The proportion of wages, salaries and pensions of the Central Government, as a proportion of GDP, which had increased from 2.7 per cent in 1996-97 to 3.3 per cent for three years up to 2000-01, tapered-off back to about 2.7 per cent by 2003-04.
Particularly, the dampening effect which the decline in energy prices is having on the inflation rate should be no more than a short-term phenomenon, and the adjustment processes, too, are only temporary. Hence the ECB’s medium-term projection that inflation will climb back towards 2%.