. alongside a significant rebound in industrial and services production, there are signs of a notable recovery in consumption. recently, momentum has slowed in the services sector compared with the manufacturing sector, which is also visible in survey results for august. the increases in coronavirus infection rates during the summer months constitute headwinds to the short - term outlook. looking ahead, a further sustained recovery remains highly dependent on the evolution of the pandemic and the success of containment policies. while the uncertainty related to the evolution of the pandemic will likely dampen the strength of the recovery in the labour market and in consumption and investment, the euro area economy should be supported by favourable financing conditions, an expansionary fiscal stance and a strengthening in global activity and demand. this assessment is broadly reflected in the september 2020 ecb staff macroeconomic projections for the euro area. these projections foresee annual real gdp growth at 8. 0 % in 2020, 5. 0 % in 2021 and 3. 2 % in 2022. compared with the june 2020 eurosystem staff macroeconomic projections, the outlook for real gdp growth has been revised up for 2020 and is largely unchanged for 2021 and 2022. given the exceptional uncertainty currently surrounding the outlook, the projections include two alternative scenarios, which we will publish on our website following this press conference. overall, the balance of risks to the euro area growth outlook is seen to remain on the downside. this assessment largely reflects the still uncertain economic and financial implications of the pandemic. according to eurostat ’ s flash estimate, euro area annual hicp inflation decreased to 0. 2 % in august, from 0. 4 % in july. on the basis of current and futures prices for oil and taking into account the temporary reduction in the german vat rate, headline inflation is likely to remain negative over the coming months before turning positive again in early 2021. moreover, in the near term price pressures will remain subdued owing to weak demand, lower wage pressures and the appreciation of the euro exchange rate, despite some upward price pressures related to supply constraints. over the medium term, a recovery in demand, supported by accommodative monetary and fiscal policies, will put upward pressure on inflation. market - based indicators of longer - term inflation expectations have returned to their pre - pandemic levels, but still remain very subdued, while survey - based measures remain at low levels. this assessment is broadly reflected in the september 2020 ecb staff macroeconomic projections for the euro area

, which foresee annual inflation at 0. 3 % in 2020, 1. 0 % in 2021 and 1. 3 % in 2022. compared with the june 2020 eurosystem staff macroeconomic projections, the outlook for inflation is unchanged for 2020, has been revised up for 2021, and is unchanged for 2022. the unchanged projection for inflation in 2022 masks an upward revision to inflation 2 / 3 bis central bankers'speeches excluding energy and food – in part reflecting the positive impact of the monetary and fiscal policy measures – which was largely offset by the revised path of energy prices. turning to the monetary analysis, broad money ( m3 ) growth continued to rise, reaching 10. 2 % in july 2020, after 9. 2 % in june. strong money growth reflects domestic credit creation and the ongoing asset purchases by the eurosystem, as well as precautionary considerations which foster a heightened preference for liquidity in the money - holding sector. 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 continued to be shaped by the impact of the coronavirus on economic activity. following strong increases in the early months of the pandemic, the annual growth rate of loans to non - financial corporations remained broadly stable in july, standing at 7. 0 %, compared with 7. 1 % in june. high rates of corporate loan growth continue to mirror elevated liquidity needs of firms to finance their ongoing expenditures and working capital and to further build liquidity buffers, although the rebound in economic activity has resulted in some recovery in their revenues. the annual growth rate of loans to households also remained stable at 3. 0 % in july – the same rate as observed since april 2020. growth in loans to the private sector continues to benefit from historically low bank lending rates. overall, our policy measures, together with the measures adopted by national governments and european institutions, will continue to support access to financing, including for those most affected by the ramifications of the 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 remains critical, in view of the sharp contraction in the