In the fight against inflation, we continue to make progress. After three consecutive years in which the inflation target was met, in 2002 the annual rate was 120 basis points above target.
The recovery has been driven almost entirely by domestic demand, supported by a virtuous circle between rising employment, labour income and consumption. Certainly, if we abstract for a moment from the fact that mark-up adjustments could have taken place, the fall in the euro exchange rate may have helped exporters hold onto their market shares as world trade stalled.