likely that this increase is related to expectations of a recovery of activity in the euro area, expectations of increasing inflationary pressure may also play a role. the more favourable expectations for economic development in the euro area are partly connected with a further improved outlook for the world economy, as is also reflected in the recent upward revision of the forecast for world growth by the imf. the growth of the us economy continues to be strong, and in japan economic indicators are now more clearly pointing towards an improvement in economic activity. in addition, in some asian countries the recovery in growth appears to be taking place somewhat earlier than expected. notwithstanding individual downside risks in the countries i have just mentioned and a more general uncertainty regarding the recovery in latin america, the world economy seems to be set for higher growth. as regards economic activity in the euro area, some important data have been released since we last met. a first estimate by eurostat for real gdp growth in the second quarter of 1999 points to slightly lower quarter - on - quarter growth compared with the first quarter of this year. however, these data do not appear to impinge on the view that there is an upturn in growth in the course of this year. in fact, industrial production data for the period up to july confirm the gradual improvement of recent months, and various survey data suggest that there was a further strengthening of output growth in the industrial sector over the summer months. evidence for the consumer sector continues to point to broadly robust consumption growth. the outlook for a continuing improvement in overall activity therefore remains favourable. in line with our expectations, the annual rate of change in the harmonised index of consumer prices ( hicp ) saw a further rise in august 1999 to 1. 2 %, up from 1. 1 % a month earlier. this upward movement was mainly caused by the ongoing increase in oil prices. some counterweight came from a decline in unprocessed food prices and from a lower rate of increase in services prices. largely reflecting this development in services prices, the hicp rate excluding more volatile components – namely energy and seasonal food – declined to 0. 9 % in august, having risen to 1. 0 % in july. oil prices continued to increase further in september and, given the relatively short time of pass - through to consumer prices, expectations of further increases in the overall hicp rate in the coming months have become firmer. in conclusion, monetary and credit developments indicate that continuous close attention must be given to upward risks to price

european solidarity, it has also been instrumental in stabilising financial markets and mitigating the risks of fragmentation, thereby supporting the transmission of our single monetary policy to all parts of the euro area. these are not the times to worry that rising government debt today could undermine price stability tomorrow. on the contrary, using fiscal and structural policies more actively in the current environment will, if used wisely, support price stability and foster central bank independence. the reason is that such policies may boost potential growth, reverse the decline in the real equilibrium interest rate and thereby increase monetary policy space in the future. this is why we applaud the clear focus of the next generation eu programme on digital and green investments, which promise to have the highest payoff for society. to support these objectives, it is crucial to swiftly put the recovery fund into action and establish a sound and efficient governance structure that ensures that funds are channelled towards the most productive and sustainable projects. looking forward, governments will at some point need to make a credible commitment to regain fiscal space. but this should happen only once the economy has returned to a sustainable growth path. these efforts should be accompanied by a revision of the european fiscal framework : fiscal rules are too complicated, hard to enforce and procyclical. monetary policy, and with this i would like to conclude, will remain a stable and reliable source of support throughout the crisis. our policy measures will continue to be geared towards ensuring that financial conditions remain consistent with a return of inflation towards our aim in the medium term, in line with our mandate. thank you. 1 schnabel, i. ( 2020 ), “ narratives about the ecb ’ s monetary policy – reality or fiction? ”, speech at the juristische studiengesellschaft, karlsruhe, 11 february. 2 for an overview, see rostagno, m. et al. ( 2019 ), “ a tale of two decades : the ecb ’ s monetary policy at 20 ”, working paper series, no 2346, ecb. 3 schnabel, i. ( 2020 ), “ the shadow of fiscal dominance : misconceptions, perceptions and perspectives ”, speech at the centre for european reform and the eurofi financial forum on “ is the current ecb monetary policy doing more harm than good and what are the alternatives? ”, berlin, 11 september. 3 / 4 bis central bankers'speeches 4 schnabel, i. ( 2020 ), “