Since the standard measures of underlying inflation typically make a two-level distinction between the transitory and persistent components of inflation, these standard measures should not be taken at face value under conditions in which the slowly-reverting component might be (at least partly) mis-classified as contributing to medium-term inflation dynamics.
On the external side, euro area exports should continue to be supported by foreign demand. On the domestic side, investment is expected to benefit further from the prevailing very favourable financing conditions and the robust corporate earnings currently being observed. Consumption growth should evolve broadly in line with expected developments in disposable income.