##grade over time. for example, if we go back to our june 2023 projections, we expected average growth of 1. 5 % in 2024. now, we expect 0. 7 %. one driver of this delayed recovery has been sluggish export growth, driven by the competitive challenges facing euro area companies. but the most important driver of our growth forecast misses has been the domestic economy. in fact, around half of the misses since end - 2021 relate to investment and a quarter relate to consumption. the behaviour of investment can be attributed to a combination of factors, including the stronger - than - expected impact of higher interest rates, higher energy prices and structural deterrents. the inertia in consumption has been striking given that the conditions for a recovery are in place. employment is historically high and real incomes 4 / 7 bis - central bankers'speeches are rising. but households continue to save an unusually high share of their income and take a cautious approach to spending. one reason for this caution is that many households have a perception of their real income growth that is well below measured data. just 37 % of households in our consumer survey believe that their real income has risen or stayed the same, even though 50 % of all households have experienced actual increases. and these households have significantly lower consumption growth than those with correct perceptions. this pessimism about real incomes is largely driven by past inflation, and so in principle it should dissipate as the high - inflation episode moves further into the rearview mirror. 2 but increasing geopolitical uncertainty could create new dents in household sentiment. in particular, if the united states – our largest export market – takes a protectionist turn, growth in the euro area is likely to take a hit. our exporters also specialise in capital goods that other countries use for export production, which makes them particularly sensitive to shifts in confidence about world trade. the main upside risks we see in the future also relate to external shocks. a rise in geopolitical tensions could push energy prices and freight costs higher in the near term, while extreme weather events could drive up food prices. the net effect of trade fragmentation and tariffs on inflation remains uncertain, as it involves assumptions that are impossible to anticipate with precision. these include potential retaliatory actions as well as exchange rate and commodity price movements. implications for monetary policy so what does this changing environment mean for our monetary policy? there are three main implications. the first concerns our current policy stance and

be considered as a clear signal in favour of a more integrated europe. i should like to take the opportunity here to express my gratitude to the european citizens and all parties involved in the changeover for their efforts and their fruitful collaboration with the eurosystem over the years. just to flag some of the efforts made : by the end of 2001, more than 6. 5 billion euro banknotes worth some eur 133 billion and amounting to almost 50 % of national banknote circulation had been frontloaded. with regard to the euro coins, more than 37. 5 billion coins with a total value of around eur 12. 4 billion had been frontloaded. overall, citizens acquired more than 150 million coin starter kits. at the beginning of this week, around 8. 1 billion euro banknotes were in circulation, which is more than 90 % of the number of euro banknotes that had initially been estimated for the end of february 2002. in terms of value, this corresponds to approximately eur 209 billion, which is equivalent to 77 % of national banknotes circulation at the end of 2001. in total, the legacy currency banknotes in circulation declined in 2001 by eur 110 billion to eur 270 billion at the end of the year. since the beginning of 2002, this figure has come down by 51 % to eur 133 billion last monday. the euro progress ratio, which calculates the value of euro banknotes in circulation divided by the total value of euro and national banknotes in circulation, was 61 % on 21 january 2002, up from 33 % on 1 january 2002. given that, in terms of transactions, around 70 % of all banknotes are put into circulation via automated teller machines ( atms ), the quick adaptation of these machines was one of the key factors for a smooth changeover. in total, more than 200, 000 atms had to be converted. in virtually all euro area countries, 100 % of the atms were converted within less than one week. as a result, on average, 75 % of all cash transactions were already effected in euro after only one week. naturally, this figure varied from country to country and from sector to sector. on the whole, the euro banknotes and coins were introduced considerably faster than originally foreseen, not least because of the favourable attitude of and quick acceptance by european citizens. today, even though the technical adaptation of the vending machines has not yet been completed, the cash changeover can be considered