This view hinges critically on the projected upturn in exports and investment. With underlying inflation expected to remain below target for some time, the downside risks to inflation remain important. At the same time, the risks associated with household imbalances remain elevated.
Overall, recent developments vindicate the Governing Council’s earlier assessments of the medium-term inflation outlook. Incoming information continues to support our confidence that the sustained convergence of inflation to levels below, but close to, 2% will proceed, and will be maintained even after a gradual winding-down of our net asset purchases.