Neither short-term inflation expectations nor forecasts of the degree of capacity utilization (output gaps) in the real economy, and neither credit growth figures nor money supply measures are, at present, signaling inflation risks. It goes without saying that we are closely monitoring developments to be able to take action fast, if need be.
In the near term, we see some signs that price levels might go down in individual euro area countries, which we interpret as an unwinding of increases seen last year in an environment of soaring energy prices. The producer price index for the euro area, in fact, dropped by 3.1% from March 2008 to March 2009.