First, to the Heads of State or of Government, who did me the honour of putting their faith in me in appointing me President of the EMI. Second, to the Finance Ministers, who resigned themselves gracefully to the existence of an institution which would be independent of the executive and who played their part, with consummate political skill, in establishing the good working atmosphere between the ECOFIN and the EMI, in the mutual respect of our respective competencies. I hope that this will be an enduring legacy. Thanks go, too, to the European Commission, with which we have been able after a little trial and error, and with both sides demonstrating good will and a certain ability to listen - to draw up the rules of the game for the indispensable cooperation which is needed to enable the project of Economic and Monetary Union to go ahead. The European Parliament - and several national parliaments - have given me the opportunity to report on the work of the EMI, in an atmosphere of constructive dialogue. Their questions and concerns, as well as those of the media and of the large number of associations from both the banking and financial sphere as well as society at large, have given me valuable insights into the expectations and concerns of our fellow citizens.
Going forward, these phenomena are expected to be reversed by a further adjustment of consumption and investment, under the assumption that the policies that spurred the sharp fall in national savings will not be repeated. As I will show you shortly, over the next two years today's current-account deficit will be substantially reduced. On the external front, global inflation continues to be high, although with some moderation in some countries. Inflationary pressures are mainly concentrated in the core part of inflation, which in several economies has been driven by the strength of the services sector (figure 9). As described in one of the boxes in the Report, the U.S. labor market remains tight and under high wage pressures. To varying degrees, this situation is also present in other developed economies and poses a risk to the decline in inflation in these countries. In fact, it is one of the factors behind the tighter global monetary policy outlook considered in the central scenario of this Report. Thus, the monetary policy implemented by central banks in the rest of the world has reinforced their contractionary stance. This has been particularly visible in developed economies, where monetary tightening processes began later. Both the U.S. Federal Reserve and the European Central Bank, along with significant hikes in their benchmark rates, have signaled a more protracted tightening than was expected some time ago. In Latin America, most central banks have continued to raise their interest rates, with the exceptions of Chile and Brazil.