, 2 %. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 6 %, quarter on quarter, in the second quarter of 2017, after 0. 5 % in the first quarter. survey data point to continued broad - based growth in the period ahead. our monetary policy measures are supporting domestic demand and have facilitated the deleveraging process. private consumption is underpinned by employment gains, which are also benefiting from past labour market reforms, and by increasing household wealth. the recovery in investment continues to benefit from very favourable financing conditions and improvements in corporate profitability. moreover, the broad - based global recovery will support euro area exports. this assessment is broadly reflected in the september 2017 ecb staff macroeconomic projections for the euro area. these projections foresee annual real gdp increasing by 2. 2 % in 2017, by 1. 8 % in 2018 and by 1. 7 % in 2019. compared with the june 2017 eurosystem staff macroeconomic projections, the outlook for real gdp growth has been revised up for 2017, reflecting the recent stronger growth momentum, and is broadly unchanged thereafter. risks surrounding the euro area growth outlook remain broadly balanced. on the one hand, the 1 / 2 bis central bankers'speeches current positive cyclical momentum increases the chances of a stronger than expected economic upswing. on the other hand, downside risks continue to exist, primarily relating to global factors and developments in foreign exchange markets. euro area annual hicp inflation was 1. 5 % in august. looking ahead, on the basis of current futures prices for oil, annual rates of headline inflation are likely to temporarily decline towards the turn of the year, mainly reflecting base effects in energy prices. at the same time, measures of underlying inflation have ticked up moderately in recent months, but have yet to show convincing signs of a sustained upward trend. domestic cost pressures, notably from labour markets, are still subdued. underlying inflation in the euro area is expected to rise gradually over the medium term, supported by our monetary policy measures, the continuing economic expansion, the corresponding gradual absorption of economic slack and rising wages. this assessment is also broadly reflected in the september 2017 ecb staff macroeconomic projections for the euro area, which foresee annual hicp inflation at 1. 5 % in 2017, 1. 2 % in 2018 and 1. 5 % in 2019. compared with the june 2017 eurosystem staff macroeconomic projections, the outlook for

- standard policy measures have been very effective in supporting the financing conditions of companies and households throughout the euro area should not make us forget the situation we witnessed at the peak of the crisis. for example, institutional weaknesses, structural fragilities and excessive risk - taking contributed to a negative feedback loop between sovereigns and banks in some countries, which significantly impaired monetary policy transmission. the resultant contraction in the euro area economy threatened price stability, our primary objective. overcoming this vicious circle required considerable effort. the pattern is now running in reverse, with positive spillovers from all countries. they all have benefited from our measures supporting growth across all of the euro area and thus laying the ground for a sustained return of inflation to levels in line with our aim. but while a cyclical adjustment has been taking place, there are still structural issues which impede sustainable economic convergence. in the years to come, a higher degree of sustained convergence and strengthened resilience will be necessary in order to achieve a better - functioning economic and monetary union. this requires, on the one hand, policy actions by national governments aimed at unlocking the productive potential of our economies. on the other hand, further decisive steps are needed to make economic and monetary union ’ s economic governance truly fit for purpose. thank you for your attention. i am now at your disposal for questions. 1 spreads over the corresponding aaa - rated euro area average yield curve. 2 article 12. 1 of the statute of the european system of central banks and of the european central bank. 3 article 14. 3 of the statute. 4 / 4 bis central bankers'speeches