, but we may hope that this will now be followed by a resumption of investment in equipment, along with increased recruitment. consequently, the overall economic climate in switzerland is likely to continue improving over the next few months, thereby supporting consumption. we project growth of slightly over 2 % for the year as a whole. this return to growth does not constitute a threat to price stability. our forecasts indicat that average inflation for this year is likely to be about 1 %, and the outlook remains just as favourable for 2007. compared with other countries, switzerland will continue to enjoy a privileged position in this respect. what may we expect from monetary policy? the inflation forecast we published in march clearly indicates that the current interest rate level is incompatible with long - term price stability. consequently, we will continue to implement the strategy of monetary normalisation pursued since june 2004. we will be doing so in the conviction that a preventive approach is much less painful for our economy than belated corrective measures. while the resumption of growth is heartening, we should not rest on our laurels since the expected figures are still lower than those needed to cope with the increasing financial requirements of our aging population. much still needs to be done to raise potential growth in our economy. the proposals on liberalisation of the domestic market that have been put to the federal parliament by the federal council are a step in the right direction. additional reforms should be planned, with the objective of stimulating internal competition and reducing the level of market regulation. it is certainly worrying to see our country's frequent low ranking in terms of the indicators that measure market liberalisation. the vitality of countries that have created more room for private initiative should serve as an inspiration to us. given the healthy state of our economy, the timing is excellent for pursuing a programme of economic reform. we would be making a grave mistake if we declared ourselves content with the results we have already achieved. by ensuring price stability, the snb, for its part, creates an environment that favours both general economic expansion and structural adjustment. stable financial markets 2005 was a year of great uncertainties, with the surge in oil prices, disruptions to refining capacity in the united states, and geopolitical tensions. what is more, the world economy is still characterised by profound imbalances, such as the deficit in us external accounts and the lack of flexibility in the chinese monetary system. turning now to monetary policy, there were often considerable dispar

responsive to changes in economic conditions. 17 in conjunction with the forward guidance on the policy rate, the commitment to continue asset purchases at least at the current pace over coming months is also helping to achieve our goals by keeping borrowing costs low for households and businesses along the yield curve. as noted in the september fomc minutes, in the months ahead, we will have the opportunity to deliberate and to clarify how the asset purchase program could best work in combination with forward guidance to support achievement of maximum employment and 2 percent average inflation. while the strong bounceback in activity from the initial devastation of covid - 19 was heartening, the recovery thus far has been highly uneven, and the path ahead is highly uncertain. by pledging to provide accommodation until shortfalls from maximum employment have been eliminated and average inflation of 2 percent has been achieved, the new forward guidance will ensure that the recovery reaches those who have been disproportionately affected, leading to a broad - based and strong recovery. continued asset purchases will help achieve these outcomes by keeping borrowing costs low for households and businesses along the yield curve. this strong support from monetary staff analysis conducted during the framework review indicates that date - based guidance may not give the committee sufficient scope to respond to incoming data, and the strategy could lose credibility if the dates are revised frequently. date - based guidance may also run a greater risk than outcome - based guidance of inadvertently signaling a pessimistic outlook. for further discussion, see jeffrey campbell, thomas b. king, anna orlik, and rebecca zarutskie ( 2020 ), “ issues regarding the use of the policy rate tool, ” finance and economics discussion series 2020 - 070 ( washington : board of governors of the federal reserve system, august ), https : / / doi. org / 10. 17016 / feds. 2020. 070. - 14 policy — if combined with additional targeted fiscal support — can turn a k - shaped recovery into a broad - based and inclusive recovery that delivers better outcomes overall.