of financial and monetary conditions. economic activity the economy remains weak. consumers continued to hold back on their spending, investment moderated and companies exported less, reflecting a slowdown in external demand and some losses in competitiveness. however, surveys point to a gradual recovery over the course of this year. as inflation falls and wages continue to grow, real incomes will rebound, supporting growth. in addition, the dampening impact of past 1 / 3 bis - central bankers'speeches interest rate increases will gradually fade and demand for euro area exports should pick up. the unemployment rate is at its lowest since the start of the euro. employment grew by 0. 3 per cent in the final quarter of 2023, again outpacing economic activity. as a result, output per person declined further. meanwhile, employers are posting fewer job vacancies, while fewer firms are reporting that their production is being limited by labour shortages. governments should continue to roll back energy - related support measures to allow the disinflation process to proceed sustainably. fiscal and structural policies should be strengthened to make our economy more productive and competitive, expand supply capacity and gradually bring down high public debt ratios. a speedier implementation of the next generation eu programme and more determined efforts to remove national barriers to deeper and more integrated banking and capital markets can help increase investment in the green and digital transitions and reduce price pressures in the medium term. the eu's revised economic governance framework should be implemented without delay. inflation inflation edged down to 2. 8 per cent in january and, according to eurostat's flash estimate, declined further to 2. 6 per cent in february. food price inflation fell again, to 5. 6 per cent in january and 4. 0 per cent in february, while energy prices in both months continued to decline compared with a year ago but at a lower rate than in december. goods price inflation also fell further, to 2. 0 per cent in january and 1. 6 per cent in february. services inflation, after remaining at 4. 0 per cent for three months in a row, edged lower to 3. 9 per cent in february. most measures of underlying inflation declined further in january as the impact of past supply shocks continued to fade and tight monetary policy weighed on demand. however, domestic price pressures are still elevated, in part owing to robust wage growth and falling labour productivity. at the same time, there are signs that growth in wages is starting to moderate. in addition, profits are absorbing part

( ecb ). the rate of price increase in the euro area was 1. 1 % - a dream result even by german standards. in january of this year, the inflation rate hit the 2 % mark. but it is expected that it will be below 2 % for the year 2000 on an annual average. by its policy, the governing council of the ecb is making it absolutely clear that it will go on conducting a monetary policy oriented to internal stability in future. that monetary policy strategy is based on two pillars. monetary growth - on which the first pillar of the ecb ’ s strategy rests - has been above the reference value of 4½ % for some time. lending to the private sector, too, has been persistently strong. both indicated that liquidity in the euro area was more than adequate. the second pillar of the strategy is a broad assessment of the outlook for future price developments. latterly, most of the relevant indicators having been pointing upward over the medium term undoubtedly due in part to the rise in oil prices and, of course, also to the downward movement of the euro exchange rate this exerts pressure on import and producer prices. and, because of second - round effects, they can in turn affect consumer prices. happily, the pay agreements recently concluded in germany have been quite within the scope for national income distribution. to that extent, the risk of second - round effects has been reduced. the same applies to opec ’ s decision to step up production of crude oil. in line with its monetary policy strategy, the ecb governing council has now raised its key interest rates three times. those decisions to raise interest rates took account of the existing upside risks to prices. they were taken to ensure continuing tension - free economic growth in the euro area, which is the basis for a sustained development of economic growth. there is thus no doubt about the ecb governing council ’ s resolve to safeguard price stability. that is significant because the future outlook for internal price stability - in other words, inflation expectations - are of major importance for a currency ’ s potential - perhaps even more important, in fact, than the current stability situation. that is because it is primarily the future that is traded in the foreign exchange markets. on the monetary side, the future for the euro looks decidedly good. experience has shown that, ultimately, the internal stability of a currency is invariably also reflected in its external value. naturally, the adjustment must not be in the sense that internal stability follows