of the governing council ’ s recent decisions. the determined implementation of all our monetary policy measures will provide support to the euro area recovery and bring inflation rates towards levels below, but close to, 2 % in the medium term. bis central bankers ’ speeches monetary policy is focused on maintaining price stability over the medium term and its accommodative stance contributes to supporting economic activity. however, in order to reap the full benefits from our monetary policy measures, other policy areas need to contribute decisively. given high structural unemployment and low potential output growth in the euro area, a cyclical recovery along the lines of the march ecb staff projections is no grounds for complacency. in particular, in order to increase investment, boost job creation and raise productivity, both the decisive implementation of product and labour market reforms and actions to improve the business environment for firms need to gain momentum in several countries. it is crucial that structural reforms be implemented swiftly, credibly and effectively, as this will not only increase the future sustainable growth of the euro area but also raise expectations of higher incomes and encourage firms to increase investment today, bringing forward the economic recovery. fiscal policies should support the economic recovery while remaining in compliance with the stability and growth pact. full and consistent implementation of the stability and growth pact is key for confidence in our fiscal framework. in view of the necessity to step up structural reform efforts in a number of countries, it is also important that the macroeconomic imbalance procedure is implemented effectively in order to address the excessive imbalances as identified in individual member states. we are now at your disposal for questions. bis central bankers ’ speeches

s flash estimate, real gdp in the euro area rose by 0. 3 %, quarter on quarter, in the last quarter of 2014, which was somewhat higher than previously expected. the latest economic data and, particularly, survey evidence available up to february point to some further improvements in economic activity at the beginning of this year. looking ahead, we expect the economic recovery to broaden and strengthen gradually. the low level of the price of oil should continue to support households ’ real disposable income and corporate profitability. domestic demand should also be further supported by our monetary policy measures leading to ongoing improvements in financial conditions, as well as by the progress made in fiscal consolidation and structural reforms. moreover, demand for euro area exports should benefit from improvements in price competitiveness and from the global recovery. however, the euro area recovery is likely to continue to be dampened by the necessary balance sheet adjustments in various sectors and the rather slow pace of implementation of structural reforms. this assessment is also broadly reflected in the march 2015 ecb staff macroeconomic projections for the euro area, which foresee annual real gdp increasing by 1. 5 % in 2015, 1. 9 % in 2016 and 2. 1 % in 2017. compared with the december 2014 eurosystem staff bis central bankers ’ speeches macroeconomic projections, the projections for real gdp growth in 2015 and 2016 have been revised upwards, reflecting the favourable impact of lower oil prices, the weaker effective exchange rate of the euro and the impact of the ecb ’ s recent monetary policy measures. the risks surrounding the economic outlook for the euro area remain on the downside but have diminished following recent monetary policy decisions and the fall in oil prices. according to eurostat ’ s flash estimate, euro area annual hicp inflation was – 0. 3 % in february 2015, after – 0. 6 % in january. the negative outcomes largely reflect the impact of the significant fall in oil prices since july 2014. on the basis of current information and prevailing futures prices for oil, annual hicp inflation is expected to remain very low or negative in the months ahead. supported by the favourable impact of our recent monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption of somewhat higher oil prices in the years ahead, inflation rates are expected to start increasing gradually later in 2015. this assessment is also broadly reflected in the march 2015 ecb staff macroeconomic projections for the euro area, which foresee annual hicp inflation at 0. 0