highest value since october 2000. and at the same time, inflation is slowly rising. the eurosystem staff macroeconomic projections forecast annual hicp inflation of 1. 5 % in 2017, 1. 4 % in 2018, 1. 5 % in 2019 and 1. 7 % in 2020. there is some indication, then, that the volume of expansionary monetary stimulus could be lowered. the euro area recovery is in considerable part driven by the healthy upswing of the german 1 / 5 bis central bankers'speeches economy, which is ongoing : 2017 was the fourth consecutive year in which gdp growth outpaced potential output. and the bundesbank expects a further rise of 2. 5 % for 2018, while growth in 2019 is seen at 1. 7 %. 3. a solid outlook for the eu economy coming back to the euro area and looking ahead, the very high level of confidence among firms and households suggests, moreover, that the upswing will continue well into 2018. the outlook for the euro area ’ s economy is quite solid. this is in considerable part due to the robust projection for the world economy. the world bank recently estimated that growth will be 3. 1 % ; this means that the world economy ’ s growth potential will be fully or almost fully reached for the first time since 2008. the strongest driver of global growth will be the east asian economies, china in particular. the world bank sees emerging markets growing by 4. 5 % in 2018 and by 4. 7 % in 2019. the global and emerging market growth has positive effects on the euro area economy as well. and i am convinced that the strong ties between the euro area and asia, notably between germany and asia, will contribute to the success stories of both asian and european countries. with this in mind, we should further deepen our political and economic relationships. and this should be based on the principles of free trade and market economies, while leaving some room for legitimate differences in rule - setting. both the imf and the ecb staff recently upped their growth expectations for the euro area. 1 according to the december 2017 eurosystem staff macroeconomic projections, the annual real gdp is set to rise by 2. 3 % in 2018, 1. 9 % in 2019, and 1. 7 % in 2020. compared with the september projections, the outlook for gdp growth has been revised upwards substantially. the eurosystem expects the economic expansion to continue, as private spending and consumption growth are reinforced by lower

andreas dombret : what's going on in europe? speech by dr andreas dombret, member of the executive board of the deutsche bundesbank, at the hong kong monetary authority, hong kong, 16 january 2018. * * * 1. introduction dear norman chan dear eddie yue dear colleagues it ’ s a pleasure for me to be invited back to the hong kong monetary authority. i value very highly the excellent cooperation, not only between the hong kong monetary authority and the bundesbank, but also more generally between our two countries. this contributes to the strong friendship of hong kong and germany. in my remarks today, i will give you an overview on what ’ s going on in europe. some of you may have become used to quite negative news from the european continent, as we not only endured the global financial crisis but also witnessed how it triggered the euro area crisis. as a result, the last ten years were something of a dry spell for the eu ’ s economy. but things have actually changed for the better of late : the economic recovery is gaining momentum and has spread to all eucountries. today, i will paint a positive picture of the current development and will also talk about the positive outlook. yet in my remarks i will also focus on the two big challenges the eu faces, namely brexit and euro area reform. my main point is that we now have a vibrant economic situation that gives us an opportunity not only to manage but to master these challenges such that the recovery becomes a sustainable story. 2. finally, a broad - based recovery of the eu economy until last year, the economic recovery following the financial crisis was rather disappointing – and that despite extensive monetary easing by the european central bank. entering the second half of 2017, however, growth momentum began. recent figures for the third quarter of 2017 show a sound gdpgrowth of 0. 6 %, quarter on quarter – after 0. 7 % in the preceding quarter. euro area unemployment stood at 8. 8 % in october – well down from its peak of 12. 1 % in 2013 and the lowest level since january 2009. and a recent study by ernst & young expects 1. 8 million new jobs to be created over the course of 2018. what is important is that the upswing has become more broadly based – across countries as well as sectors. and this is also reflected in the positive economic sentiment. in december last year, the european commission index reached a 17 - year peak to record the