But as you can see, we have revised inflation projections higher in each Monetary Policy Report (MPR) since. This is largely due to repeated updates to our view of the strength and persistence of supply chain disruptions.
This in turn, can cause differential effective overvaluation/undervaluation of the currency across different countries within a currency union and possible erosion of long-term competitiveness of affected countries. Relative to the Euro area, the Asian region exhibits much more pronounced diversity in economic structure, stages of development, demographic features, social and political systems and even lower mobility of factors of production, particularly labour.