the euro area countries, especially in those having suffered most from stressed conditions in recent years but having at the same time executed substantial structural measures to improve the performance in the longer run. [ slide 17 ] corporate bond yields remain low … the importance of market funding for non - financial corporations is increasing in the euro area. the asset purchases support the corporate bond markets, as investors selling government bonds are expected to switch to higher - risk corporate bonds, reflecting the portfolio balancing effect. corporate bond yields reached a record low in the euro area in early 2015. although corporate emissions have partially compensated for the decline in bank lending in the case of large corporations, smes do not have the same access to alternative sources of funding and are therefore still highly dependent on bank lending. [ slide 18 ] average interest rates on new housing loans … from the perspective of achieving price stability it is vital that monetary policy measures have a positive effect not just on corporate expenditure, but also household expenditure. [ slide 19 ] the recovery in the euro area is expected to continue the recovery in the euro area is expected to continue [ slide 20 ] ecb staff projections in september as a result of the accommodative monetary policy measures, the inflation and growth outlook have improved. the information available in september indicates a continued though somewhat weaker economic recovery and a slower increase in inflation rates compared with earlier expectations. the recovery will be supported by domestic dynamics, while the external environment has become less favourable. despite downward revision, ecb staff projections published last week still point to a sustained recovery leading to a real growth rate of 1. 8 %. % in 2017. [ slide 21 ] inflation outlook subdued 2015 – 2016 bis central bankers ’ speeches inflation is expected to remain very low but is projected to rise over the projection horizon, reaching 1. 7 % in 2017. the projection for hicp inflation also entails a downward revision, largely due to lower oil prices. [ slide 22 ] finland falls further behind euro area growth the accommodative monetary policy is beneficial to both the euro area and the finnish economy. the bank of finland has assessed the impact of the expanded asset purchase programme on the finnish economy. according to these calculations, lower interest rates and a weaker exchange rate will increase the gpd growth rate in finland by 0. 3 percentage points in two years. however, finland has fallen further behind euro area growth as exports have suffered and the labour market situation has deteriorated. unfortunately, finland is not expected to reach the pace of the

something to keep in mind in all postmortems of the recent poly - crisis years. looking at the latest policy decisions, progress in lowering inflation has enabled us to make three 25 basis - point cuts to interest rates since june 2024. the most recent cut was unanimously decided last thursday, as we now have greater confidence that inflation is converging towards 2 % on a sustained basis. disinflation in the euro area is well on track. all in all, a soft landing seems plausible in the euro area. however, growth is expected to remain sluggish, as shown in the right - hand graph. the growth outlook has weakened quite clearly in the past few months, which could also increase disinflationary pressures. based on the current outlook, and as our rates still are at the restrictive territory, the direction of rate changes is clear. the speed and scope of rate cuts will depend on our overall assessment of the trend in three variables : the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. slide 7. reflections on the ecb's next strategy review in 2025 based on the experience of recent years, the symmetric, medium - term 2 % inflation target has served us well. it has provided a clear anchor and enough pre - calibrated and meaningful flexibility in terms of both the timing and instruments of policy. we have not had to take the drastically contractionary policy actions that the old target might have 3 / 7 bis - central bankers'speeches implied. and we didn't need to show volckerian stubbornness, with all respect to him, thanks to the fact that inflation expectations remained well - anchored. thus, in my view, the inflation target itself does not need to be revisited now. as the saying goes, don't fix it if it ain't broke. however, we do need a deeper understanding of inflation dynamics and the secular trends that are transforming the operational environment of monetary policy, such as geopolitical fragmentation, climate change, labor market transition and other structural drivers of the natural rate of interest. geopolitical tensions have risen substantially with russia's illegal war in ukraine, the tragic war in the middle east, and china's strategic aims, both technological and military. trade wars, protectionism and geoeconomic fragmentation are the byproducts of these tensions, and so are the diversion and relocation of global value chains. key questions for central bankers are, how significant are