Most importantly, there is a risk that the current temporarily high annual inflation rates, which may persist for a rather protracted period of time, could have second-round effects on wage and price-setting, in a context of moderating but ongoing economic growth and continuing very vigorous money and credit expansion.
Although global economic growth is moderating this year, it is expected to continue to support euro area external demand, partly as a consequence of strong growth in emerging market economies. Both investment and consumption should continue to contribute to economic expansion as profitability has been sustained, credit growth remains robust and employment conditions have improved.