, whose pmi fell 1. 1 pp to 46. 9. conversely, the manufacturing pmi rose 1. 3 pp to 58. 4. similarly, the european commission ’ s consumer confidence indicator also contracted. the latest ecb staff projections were published in late september ; the baseline scenario indicates a drop in euro area gdp of 8 % in 2020, followed by growth of 5 % in 2021. however, the feasibility of these figures is in doubt, since one of the assumptions under this baseline scenario was that the epidemiological situation would not worsen in the near term. developments since the projection cut - off date appear to contradict that assumption. the recent news regarding the availability of a vaccine early next year is obviously to be welcomed. if confirmed, this should serve to improve confidence and preclude the more negative economic scenarios, although it will take time for the attendant effects on activity to become apparent. as regards the euro area inflation outlook, the ecb forecasts a very modest rise this year of 0. 3 %, with a recovery to 1 % in 2021 and 1. 3 % in 2022. however, these values are well short of the medium - term price stability target, defined as inflation rates below, but close to, 2 % over the medium term. the latest flash estimate for the euro area harmonised index of consumer prices, referring to october, shows annual inflation of - 0. 3 %, weighed down by the recent appreciation of the euro, low energy and services prices, and the temporary impact of the vat cut in germany. core inflation held at an all - time low of 0. 2 % in october, unchanged on september. it is worth noting that 35 % of the headline inflation components recorded negative growth rates, and around 70 % of the components grew at rates of less than 1 %. consumer expectations have held on a downward path since march, while the metric derived from financial markets ( five - year swaps ) declined slightly to 1. 16 %. meanwhile, the long - term expectations of the survey of professional forecasters held stable at around 1. 7 %. the situation i have just described is, therefore, one of a fragile and uncertain recovery in the euro area, in which some of the downside risks for our baseline scenario, which were identified just a few months ago, are materialising. the scenario of slower economic growth in the short term, together with recent price trends ( likewise worse than expected ), increase the risk

before taking a decision on issuing it. by way of example, i would highlight the need to minimise the adverse impact that potential banking disintermediation would have on financial stability, or the possible effects of the digital euro on situations of financial instability. these aspects probably require an additional analytical push to ensure that these unwanted secondary effects can be avoided. in any event, i believe the eurosystem ’ s current position does not differ substantially from that of those central banks that are immersed in a similar line of thought. where we may diverge somewhat more is the pace at which we are moving, largely as a result of the different state we are in relative to the scenarios indicated. for instance, in the nordic countries the diminished use of cash is already a fact. likewise, means of payment in china https : / / www. bde. es / f / webbde / spa / sispago / ficheros / es / estadisticas. pdf. appear to be tending towards concentration in ecosystems managed by a small group of local technological giants outside the traditional banking system. what this discussion shows is the need we central banks have to understand the changes the economy is facing as a result of the digital transformation and, most particularly, to appreciate the scale of their impact on the financial sector. the importance of the functions assigned to us both in monetary policy and in payment systems means our action must always have the broadest consensus and be preceded by rigorous and in - depth analysis. squaring the rigour of our decisions in areas of undeniable importance for society at large with the flexibility and swiftness of response that a rapidly transforming economy demands poses a challenge. to resolve this challenge we must call on our capacity to anticipate these situations so as to be able to analyse them in good time and in all their depth. i consider that both the ongoing review of monetary policy strategy and the strategy to address the challenges arising from the growing digitalisation of the financial system are two sound exponents of this way of working. they will allow us to continue adding the maximum value to the european economy and, by extension, to spanish society. thank you. references aguilar, p., o. arce, s. hurtado, j. martinez - martin, g. nuno, and c. thomas ( 2020 ). “ the ecb monetary policy response to the covid - 19 crisis ”, occasional papers, no 2026, banco de