march 2021. today ’ s monetary policy decisions were taken to ensure that inflation remains on a sustained path towards levels that are below, but close to, 2 % over the medium term. while there are signs that some of the idiosyncratic domestic factors dampening growth are starting to fade, the weakening in economic data points to a sizeable moderation in the pace of the economic expansion that will extend into the current year. the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment. moreover, underlying inflation continues to be muted. the weaker economic momentum is slowing the adjustment of inflation towards our aim. at the same time, supportive financing conditions, favourable labour market dynamics and rising wage growth continue to underpin the euro area expansion and gradually rising inflation pressures. today ’ s decisions will support the further build - up of domestic price pressures and headline inflation developments over the medium term. significant monetary policy stimulus will continue to be provided by our forward guidance on the key ecb interest rates, reinforced by the reinvestments of the sizeable stock of acquired assets and the new series of tltros. in any event, the governing council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation continues to move towards the governing council ’ s inflation aim in a 1 / 3 bis central bankers'speeches sustained manner. let me now explain our assessment in greater detail, starting with the economic analysis. euro area real gdp increased by 0. 2 %, quarter on quarter, in the fourth quarter of 2018, following growth of 0. 1 % in the third quarter. incoming data have continued to be weak, in particular in the manufacturing sector, reflecting the slowdown in external demand compounded by some country and sector - specific factors. the impact of these factors is turning out to be somewhat longerlasting, which suggests that the near - term growth outlook will be weaker than previously anticipated. looking ahead, the effect of these adverse factors is expected to unwind. the euro area expansion will continue to be supported by favourable financing conditions, further employment gains and rising wages, and the ongoing – albeit somewhat slower – expansion in global activity. this assessment is broadly reflected in the march 2019 ecb staff macroeconomic projections for the euro area. these projections foresee annual real gdp increasing by 1. 1 % in 2019, 1. 6 % in 2020 and 1. 5 %

. 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 still necessary for the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term. 2 / 3 bis central bankers'speeches in order to reap the full benefits from our monetary policy measures, other policy areas must contribute more decisively to raising the longer - term growth potential and reducing vulnerabilities. the implementation of structural reforms in euro area countries needs to be substantially stepped up to increase resilience, reduce structural unemployment and boost euro area productivity and growth potential. this is particularly important in view of the overall limited implementation of the 2018 country - specific recommendations, as recently communicated by the european commission. regarding fiscal policies, the mildly expansionary euro area fiscal stance and the operation of automatic stabilisers are providing support to economic activity. at the same time, countries where government debt is high need to continue rebuilding fiscal buffers. all countries should continue to increase efforts to achieve a more growth - friendly composition of public finances. likewise, the transparent and consistent implementation of the european union ’ s fiscal and economic governance framework over time and across countries remains essential to bolster the resilience of the euro area economy. improving the functioning of economic and monetary union remains a priority. the governing council welcomes the ongoing work and urges further specific and decisive steps to complete the banking union and the capital markets union. we are now at your disposal for questions. 3 / 3 bis central bankers'speeches