credit creation, notwithstanding a recent moderation in credit dynamics. the narrow monetary aggregate m1 remained the main contributor to broad money growth. the annual growth rate of loans to non - financial corporations rebounded to 3. 7 % in february 2019, from 3. 4 % in january, reflecting mainly a base effect. looking through short - term volatility, the annual growth rate of loans to non - financial corporations has moderated in recent months, reflecting the typical lagged reaction to the slowdown in economic growth. at the same time, the annual growth rate of loans to households remained broadly unchanged at 3. 3 % in february. the euro area bank lending survey for the first quarter of 2019 suggests that overall bank lending conditions remained favourable. our monetary policy measures, including the new series of tltros that we announced in march, will help to safeguard favourable bank lending conditions and will continue to support access to financing, in particular for small and medium - sized enterprises. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. in order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. at the same time, countries where government debt is high need to continue rebuilding fiscal buffers. all countries should reinforce their efforts to achieve a more growth - friendly composition of public finances. likewise, the transparent and consistent implementation of the european union ’ s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the governing council welcomes the ongoing work and urges further specific and decisive steps to complete the banking union and the capital markets union. we are now at your disposal for questions. 2 / 2 bis central bankers'speeches

##ence of the domestic economy and gradually rising inflation pressures. however, an ample degree of monetary accommodation remains necessary to safeguard favourable financing conditions and support the economic expansion, and thus to ensure that inflation remains on a sustained path towards levels that are below, but close to, 2 % over the medium term. significant monetary policy stimulus is being provided by our forward guidance on the key ecb interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets and the new series of tltros. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp rose by 0. 2 %, quarter on quarter, in the fourth quarter of 2018, following an increase of 0. 1 % in the third quarter. incoming data continue to be weak, especially for the manufacturing sector, mainly on account of the slowdown in external demand, which has been compounded by some country and sector - specific factors. as the impact of these factors is turning out to be somewhat longer - lasting, the slower growth momentum is expected to extend into the current year. looking ahead, the effect of these adverse factors is expected to unwind. the euro area expansion will continue to be supported by favourable financing conditions, further 1 / 2 bis central bankers'speeches employment gains and rising wages, and the ongoing – albeit somewhat slower – expansion in global activity. the risks surrounding the euro area growth outlook remain tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets. according to eurostat ’ s flash estimate, euro area annual hicp inflation was 1. 4 % in march 2019, after 1. 5 % in february, reflecting mainly a decline in food, services and non - energy industrial goods price inflation. on the basis of current futures prices for oil, headline inflation is likely to decline over the coming months. measures of underlying inflation remain generally muted, but labour cost pressures have strengthened and broadened amid high levels of capacity utilisation and tightening labour markets. looking ahead, underlying inflation is expected to increase over the medium term, supported by our monetary policy measures, the ongoing economic expansion and rising wage growth. turning to the monetary analysis, broad money ( m3 ) growth increased to 4. 3 % in february 2019, from 3. 8 % in january. looking through some volatility in monthly flows, m3 growth continues to be backed by bank