to 1. 5 % in march and core inflation ( excluding energy and unprocessed food ) stood at 0. 7 %. from a medium - term perspective, the ecb projection exercise points to inflation moving on a very gradual upward path, with the result that, towards the end of 2019, it would still stand below 2 %. against this background, in march the ecb governing council decided not to change benchmark interest rates and repeated its commitment to continue net asset purchases at a monthly pace of €60 billion until the end of december 2017 or beyond, if necessary, and, 3 / 9 in any case, until a sustained adjustment is seen in the path of inflation consistent with its medium - term objective of a rate of close to but below 2 %. the monetary policy measures of recent years have resulted in a significant improvement in financing conditions, which has been particularly visible in the case of the spanish economy, both as regards the low cost of new funds and the gradual normalisation of lending conditions. this reduction has been particularly significant in terms of the cost of financing public debt. performance of and outlook for the spanish economy the spanish economy grew 0. 7 % in the last quarter of 2016 and the latest indicators show that the growth rate in the opening months of 2017 could have been slightly higher. according to the banco de espana's projections published at the beginning of april, gdp growth is estimated to be 2. 8 % in 2017 as a whole, which is somewhat lower than in 2016, but continues to be significantly higher than the euro area average. turning to its composition, domestic demand remains the main engine of economic growth. household consumption remains robust, underpinned by the improvement in the outlook for employment, and favourable developments in household disposable income and in lending standards. real estate market indicators show an ongoing recovery in the sector which, albeit uneven in terms of market segments and geographical areas, is also contributing to the buoyancy of household spending and employment. although investment has decelerated in recent quarters, it remains firm given the favourable situation of financial conditions and final demand. the banco de espana's projections anticipate that the current growth phase of the spanish economy, dating back to the second half of 2013, will persist over the next few years and that it will continue to be supported by gains in competitiveness, the ongoing favourable financial conditions, and the expected positive performance of international markets. the foundations of the recovery in the spanish economy are, in

- 2012. alongside the most notable clean - up and provisioning drive, a recapitalisation and restructuring strategy was applied based on the analysis of balance sheets and on the tests based on stressed macroeconomic scenarios which concluded a year ago. this was all done in collaboration with the european commission, the ecb, the imf and the european banking authority, in the presence of independent consultants and auditors, and with the participation of the banco de espana supervisory and regulatory teams, which was technically very important for the performance of the exercise. the recapitalisation of our banks has been carried out through private access to markets ; the injection of capital financed via the financial assistance programme agreed with the european authorities ; the conversion of hybrid instruments into capital instruments ; and the provision of funds by the frob ( fund for the orderly restructuring of the banking sector ) and the deposit guarantee fund. from may 2009 to last september, the public assistance afforded to financial institutions to reconstitute their capital amounted to a somewhat over €61 billion ( 6 % of our 2012 gdp ), close to €39 billion of which were under the financial assistance programme approved with the european authorities in july 2012. the essential aim of these recapitalisation operations using public funds has been none other than to preserve the deposits in the institutions in question ( as is widely known, these are the only bank liabilities not to have undergone any loss throughout the process ), providing for business continuity by these institutions ’ own means or by their absorption by others. this is a crucial point i wish to highlight, as it is not always well - understood. regarding transparency, i would signal the initiatives taken by the banco de espana, which have been favourably viewed by the european and international authorities and by the markets, on relevant exposures and refinanced loans. and mention should be made of the guidelines on accounting practices in respect of refinanced loans. finally, i wish to underscore the approval of law 9 / 2012 of 14 / 2012 on the restructuring and resolution of credit institutions. to a most significant extent, this legislation stole a march on the future directive that will regulate these processes in europe. spanish banks ’ solvency position has improved clearly in 2013. the average core capital in our banking system will stand at around 10. 5 % as at december 2013, more than 1 pp above the related figure a year earlier. and, at the same time, exposure to the real estate sector has diminished drastically