Turning to recent monetary developments, there were already indications in November 2000 that a moderation in monetary growth had been under way for some months. In late 2000 and early 2001, these signs of moderation became stronger.
With regard to the outlook for price developments, the main and serious concern is that a protracted period of high inflation, even if it is largely due to the direct and indirect effects of previous commodity price increases, has the potential to adversely affect price and wage-setting behaviour and short to medium-term inflation expectations, thereby inducing a wage-price spiral via broadly-based second-round effects.