global economic activity is, in fact, slowing down and growth estimates for next year have been progressively revised downwards by leading international institutions. the deterioration in the outlook continues to be affected by higher inflation, marked uncertainty over the ukraine conflict, worsening financial conditions and the weakening economy in china. 1 / 8 bis - central bankers'speeches 6. nevertheless, despite the challenging situation, based on the projections in the latest issue of the bank of italy's economic bulletin – which will likely be revised slightly upwards in light of the new data – the baseline scenario assumes a slight growth on average for the year 2023 ; only in a stressed scenario ( with a total freeze on russian gas imports ) would there be a decrease on average over the year. however, economic uncertainty remains exceptionally high because of the extreme and unpredictable nature of some risks, especially those linked to the war. 7. the surge in inflation, which has reached levels unmatched for decades in the advanced economies, is of grave concern. according to the latest available data, the increase in consumer prices exceeded 8 per cent in the united states in september and, based on a preliminary estimate, neared 11 per cent in the euro area in october. in italy, inflation is running at an even faster pace than the average : according to the harmonised definition, it was 12. 8 per cent in october. 8. in response to the strong acceleration in prices, central banks have started a normalisation of monetary conditions in order to reabsorb the high degree of accommodation decided upon to offset the effects of the pandemic. this is necessary to keep inflation expectations anchored and bring inflation back in line with the definition of medium - term price stability adopted in the leading advanced economies. 9. in the euro area, following the end of its net asset purchases, the ecb governing council started increasing its key interest rates, by 2 percentage points overall since july, thus bringing the deposit facility rate back from negative values to 1. 5 per cent. the council has announced that it expects to raise them again at its next meetings, at a pace and to a level that will be determined on the basis of new data and on revisions to the inflation and growth outlooks. markets and non - bank intermediaries 10. the normalisation of monetary policy, which is necessary to give a firm and unequivocal signal on inflation, is coinciding – in this difficult global situation – with heightened market volatility and occasional episodes of illiq

back our growth potential. we cannot afford a sequential, small - steps approach. the necessary reforms are interconnected and mutually reinforcing : they must be implemented with determination and vision, building on the recent analyses by mario draghi and enrico letta. europe can and must take control of its own destiny. like niccolo machiavelli ’ s archer, we must aim higher to hit our target. 23 together, member states can turn challenges into opportunities and build a future of prosperity and progress for all european citizens. ‘ it ’ s like the clever archer who senses that his target is too far off, knows the limitations of his bow, and so aims far higher than he normally would, not because he really wants his arrow to go that high, but to have it fall from a height on to his target ’. ( n. machiavelli, the prince, chapter vi, 1532, translated by tim parks, 2009 ).