higher as well. member states should also take note of the european commission's fiscal policy guidance for 2024. turning to growth, we moved away from a baseline scenario with a technical recession at the turn of the year, as economic activity proved to be more resilient than expected at the end of 2022. in our march projections, the outlook for growth was revised up, to an average of 1 % in 2023. however, these projections were finalised before the events of the past few weeks, which are now adding uncertainty to our assessments. nevertheless, reduced concerns about energy shortages and price increases, coupled with the continued resilience of the labour market, are expected to support activity over the coming quarters. in short, the growth outlook remains weak, but it has improved somewhat. at the governing council meeting in march, we decided to increase the three key ecb interest rates by 50 basis points, in line with our determination to ensure the timely return of inflation to our 2 % medium - term target. as part of the monetary policy normalisation process, from the beginning of march, our asset purchase programme portfolio has been declining at a pace of €15 billion per month, on average, and it will continue to decline at this pace until the end of june 2023, while its subsequent pace 2 / 3 bis - central bankers'speeches will be determined overtime. uncertainty has increased, so we are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability in the euro area. but let me go back to financial stability. just a few weeks ago, before tensions in financial markets emerged on both sides of the atlantic, the overall improvement in the outlook for growth and inflation was supporting overly benign macro - financial expectations on the part of banks and financial market participants. despite rising funding costs, bank profitability has improved, driven by significantly higher net interest income while impairments and provisions have been muted so far. overall, from a system - wide perspective, euro area banks are moderately exposed to interest rate risk. most are actually positioned to initially benefit from increasing interest rates, which boost net interest margins. on average, loan book repricing tends to more than offset higher funding costs and mark - to - market losses on fixed income securities. it is inevitable however that, with the tightening of financing conditions and in line with our policy objective, lending dynamics are weakening and may weigh on bank profitability going forward. of course, certain bank business models

finances in the euro area. it is imperative that member states, the commission and the council, in fulfilling their respective responsibilities, implement the revised framework in a rigorous and consistent manner. sound fiscal policies, together with a stability - oriented monetary policy, are fundamental to the success of economic and monetary union. for its part, the ecb will not waver in its commitment to delivering price stability. the lisbon strategy let me now turn to the recently concluded mid - term review of the lisbon strategy. five years after the launch of the strategy, there is broad agreement that progress in structural reforms has been mixed. on the positive side, some eu member states have made good progress towards implementing reforms in recent years. however, much still needs to be done if europe as a whole is to face successfully the challenges of technological change, globalisation and ageing populations. in this context, the ecb welcomes the presidency conclusions of the brussels european council of 22 and 23 march 2005, which state that “ it is essential to relaunch the lisbon strategy without delay and refocus priorities on growth and employment ”. member states urgently need to promote innovation and human capital formation, establish a regulatory environment which is friendlier for businesses, accelerate market liberalisation and increase labour utilisation and labour market flexibility. against this background, attention must now shift towards implementing the newly refocused lisbon agenda. closing the implementation gap in all member states is essential in order to reap the full benefits of structural reforms in terms of a higher growth potential and a higher employment rate in the medium term, as well as improved consumer and business confidence in the short term. the new governance framework introduced by the european council should support this process by fostering effective decision - making and priority - setting, and by increasing national ownership. peer support and, where necessary, peer pressure need to be employed to push the lisbon strategy forward. in this context, benchmarking on the basis of sensibly defined quantitative indicators, taking account of national circumstances, would be a useful tool and a welcome driver for public discussion. moreover, this would raise public awareness of the fact that successful implementation of structural reforms is indeed possible in eu member states and would show that structural reforms lead to important benefits. as for the ecb, we will continue to support the lisbon process by maintaining price stability, which fosters sustainable output growth, employment and social cohesion. at the same time, comprehensive structural reforms aimed at increasing flexibility and competition in labour,