the second quarter. looking beyond the immediate disruption stemming from the coronavirus pandemic, euro area growth is expected to resume as the containment measures are gradually lifted, supported by favourable financing conditions, the euro area fiscal stance and a resumption in global activity. given the highly uncertain duration of the pandemic, the likely extent and duration of the imminent recession and the subsequent recovery are difficult to predict. however, without pre - empting the 2 / 4 bis central bankers'speeches forthcoming eurosystem staff macroeconomic projections, which will be published in june, growth scenarios produced by ecb staff suggest that euro area gdp could fall by between 5 % and 12 % this year, followed by a recovery and normalisation of growth in subsequent years. the extent of the contraction and the recovery will depend crucially on the duration and the success of the containment measures, how far supply capacity and domestic demand are permanently affected, and the success of policies in mitigating the adverse impact on incomes and employment. according to eurostat ’ s flash estimate, euro area annual hicp inflation decreased from 0. 7 % in march to 0. 4 % in april, largely driven by lower energy price inflation, but also slightly lower hicp inflation excluding energy and food. on the basis of the sharp decline in current and futures prices for oil, headline inflation is likely to decline considerably further over the coming months. the sharp downturn in economic activity is expected to lead to negative effects on underlying inflation over the coming months. however, the medium - term implications of the coronavirus pandemic for inflation are surrounded by high uncertainty, given that downward pressures linked to weaker demand may be partially offset by upward pressures related to supply disruptions. market - based indicators of longer - term inflation expectations have remained at depressed levels. even though survey - based indicators of inflation expectations have declined over the short and medium term, longer - term expectations have been less affected. turning to the monetary analysis, broad money ( m3 ) growth increased to 7. 5 % in march 2020, from 5. 5 % in february. money growth reflects bank credit creation for the private sector, which is driven to a large extent by drawing on credit lines, and low opportunity costs of holding m3 relative to other financial instruments, while heightened economic uncertainty appears to have triggered a shift towards monetary holdings, likely for precautionary reasons. in this environment, the narrow monetary aggregate m1, encompassing the most liquid forms of money, continues to be

the main contributor to broad money growth. developments in loans to the private sector have also been shaped by the impact of the coronavirus. the annual growth rate of loans to households stood at 3. 4 % in march 2020, after 3. 7 % in february, while the annual growth rate of loans to non - financial corporations stood at 5. 4 % in march, after 3. 0 % in february. these developments are also clearly visible in the results of the euro area bank lending survey for the first quarter of 2020, which indicate a surge in firms ’ demand for loans and for drawing on credit lines to meet liquidity needs for working capital, while financing needs for fixed investment declined. demand for loans to households for house purchase increased less than in the previous quarter. credit standards for loans to firms tightened slightly, while credit standards for loans to households tightened more strongly. in both cases, this was related to the deterioration in the economic outlook and a decline in the creditworthiness of firms and households. at the same time, banks expect an easing of credit standards for loans to firms in the second quarter of 2020. our policy measures, in particular the more favourable terms for tltro iii operations and the collateral easing measures, should encourage banks to extend loans to all private sector entities. together with the credit support measures adopted by national governments and european institutions, they support ongoing access to financing, including for those most affected by the ramifications of the coronavirus pandemic. to sum up, a cross - check of the outcome of the economic analysis with the signals coming from the monetary analysis confirmed that an ample degree of monetary accommodation is necessary for the robust convergence of inflation to levels that are below, but close to, 2 % over the medium term. regarding fiscal policies, an ambitious and coordinated fiscal stance is critical, in view of the sharp contraction in the euro area economy. measures taken should as much as possible be targeted and temporary in nature in response to the pandemic emergency. we welcome the 3 / 4 bis central bankers'speeches endorsement by the european council of the eurogroup agreement on the three safety nets for workers, businesses and sovereigns, amounting to a package worth €540 billion. at the same time, the governing council urges further strong and timely efforts to prepare and support the recovery. in this regard, we welcome the european council agreement to work towards establishing a recovery fund dedicated to dealing with this unprecedented crisis. we are now ready to take your questions.