In addition, financing conditions in the euro area are favourable, as real and nominal short-term and long-term interest rates are currently at very low levels. Furthermore, the expected further decline in consumer price inflation in 2002 will lead to higher growth in real disposable income that should support domestic demand.
Inflation rates have been falling significantly over recent months, from a peak of 3.4% in March 2001 to a level, according to the Eurostat flash estimate, of 2% in December.