With the economy expected to remain near its production capacity throughout this period, core inflation is projected to move back up to the 2 per cent target by the end of 2005. That is the same projection that we made last April.
The interest payment burden of euro area firms – the ratio of their gross interest payments to gross operating surplus – has actually fallen from 22% in 2008 to less than 12% at the end of 2013, which suggests that firms are in a stronger position today to withstand a period of low inflation.