there has, for example, been a rapid growth of the euro - denominated private bond market. the euro did not cause this trend, but it has given it a major impetus. the process of monetary policy - making and its implementation has functioned efficiently. the evolution both of external inflation forecasts and of inflation expectations derived from the analysis of long - term interest rates ( in particular, index - linked bonds ) indicates that the financial markets and economists widely expect medium - term price developments that are in line with the ecb ’ s definition of price stability. obviously, bond yields and many external forecasts incorporate expectations of future policy changes and therefore offer a judgement on prospective monetary policy decisions, as well as on decisions taken in 1999 and 2000. as such, they provide a positive assessment of the overall monetary framework. actual inflation in 1999 stood at 1. 1 %, compatible with price stability. although inflation has increased this year, it is still relatively low, both historically and compared with the united states, for instance. above all, as indicated earlier, monetary union has proven to be a catalyst for major improvements in the structural economic environment. in this respect, there is thus also reason to expect that the euro area could benefit over time from the advances in the new technologies, as the united states has apparently been doing already. europe is thus changing and much has already been achieved. the advances are noteworthy, although they are not always appreciated, not even by europeans themselves. there remains a great deal to be done in order to further upgrade the structural environment. however, this in itself creates opportunities for the future as there is a large potential to be exploited. 3. outlook for euro area economy let me now turn to the conjunctural side of the economic environment. where economic growth is concerned, the euro area economy has impressively overcome the negative mood prevailing in early 1999, recovering to reach a state of affairs not seen for more than a decade. real gdp growth in the euro area has shown a strong performance since mid - 1999, with four consecutive quarters of 0. 9 % growth, quarter - on - quarter, and the forces underlying sound growth in the medium term remain in place. the external environment remains favourable. domestic demand is expected to continue to be strong as well. consumption is benefiting from high consumer confidence and further increases in employment, and investment is being stimulated by higher corporate profitability and increasing rates of capacity utilisation. domestic financing conditions are also good. this positive outlook

inflation rates are foreseen to rise further during 2016 and 2017, supported by the expected economic recovery, the pass - through of past declines in the exchange rate, and, assuming current prices in futures markets materialise, somewhat higher oil prices in the years ahead. the governing council will continue to closely monitor the risks to the outlook for price developments over the medium term, in particular risks related to the pass - through of the monetary policy measures as well as global economic, financial, commodity price and exchange rate developments. our monetary policy continues to aim to safeguard price stability. since mid - 2014 we have taken a number of both conventional and unconventional measures to address the heightened risks of too prolonged a period of too low inflation, encompassing targeted longer - term refinancing operations ( tltros ), a third covered bond purchase programme ( cbpp3 ) and an asset - backed securities purchase programme ( abspp ). in january 2015, an expanded asset purchase programme ( app ) was launched. the app continues to proceed smoothly and – together with other monetary policy measures – has a favourable impact on the cost and availability of credit for firms and households, contributing to the euro area recovery and a gradual rise in inflation. we intend to purchase private and public securities until the end of september 2016, or beyond if necessary, and, in any case, until we bis central bankers ’ speeches see a sustained adjustment in the path of inflation that is consistent with our aim of achieving inflation rates below, but close to, 2 % over the medium term. in the light of renewed risks that have emerged on the back of recent developments in global and in financial and commodity markets, we are closely monitoring all relevant incoming information and are ready to use all the instruments available within our mandate to act, if warranted, in particular by adjusting the size, composition and duration of the asset purchase programme. since the peak of the crisis, the euro area has made significant progress towards sound public finances and implementing structural reforms. given the high structural unemployment level and low potential output, the ongoing cyclical recovery should be supported by effective structural policies. further product market and labour market reforms, and, in particular, actions to improve the business environment, which should include an adequate public infrastructure, are of the essence and need to gain momentum across the euro area countries. such reforms will increase productive investment, boost job creation and raise productivity, while increasing the adjustment capacity and resilience of the euro area economies to global shocks. fiscal policies should