Quantifying the impact of these supply factors is difficult, but the implication is that there is likely less excess supply in the economy than we thought there would be. We now expect the output gap to close sometime in the middle quarters of 2022, which is earlier than we projected in July.
Of course the rest of the world matters, and will do increasingly, but proximity counts too, and Europe is the context. This is even more so given the recent stresses which have been felt by the euro area, and which have had their effect worldwide, but more particularly throughout Europe.