example has declined by no less than 37 per cent in the calendar year 2000 and by a further 17, 6 per cent in the current year to date. according to bloomberg news services, the historical price volatility over a ten - day period reached levels in excess of 70 per cent per annum in april 2001. in early january 2001, the volatility appeared to be even higher. from its peak on 10 march 2000, the nasdaq has fallen by a staggering 58, 3 per cent. the dow jones index has also declined but not by the same magnitude. it declined by 5½ per cent during 2000 and has remained virtually unchanged in the year to date, with historical volatility reaching levels around 32 per cent in march and april of this year. other stock market indices have declined in sympathy with wall street. fortunately, as a matter of interest, the all share price index of the jse securities exchange has increased by some 5, 1 per cent since the beginning of 2000 to date. for most of the last decade the financial world has closely watched the economic expansion of the united states, which seemed to defy what had been learnt about business cycles, and the concomitant monetary policy tightening by the federal reserve from late 1999. similarly, in the euro area and in the united kingdom, both the ecb and the bank of england were also in monetary policy tightening modes for most of 2000. the tightening in the euro area and in the uk, however, was in reaction to inflationary pressures which resulted mainly from higher oil prices. based on a perception that monetary policy was entering an uncertain phase in the major economies of the world in the latter half 2000, plus given the demanding price earnings ratios on the so - called hi - tech shares especially, market participants seemed to react more forcefully to macroeconomic news than usual, thus exacerbating the volatility. stock markets in general turned positive in january 2001 with the announcement of a 50 basis points reduction in the federal reserve ’ s target for the fed funds rate on 3 january 2001. this was followed by a further 50 basis points cut on 31 january. this buoyed markets, at least temporarily. however, perceptions again deteriorated on fears that the united states might be heading for a recession which could eventually result in depressed world economic activity. a principal feature in the currency markets during 2000 and 2001 has been the strength of the us dollar in the international financial markets. one of the important factors behind the strong us

euro area by acting in a firm and timely manner. let me now explain our assessment in greater detail, starting with the economic analysis. on a quarterly basis, euro area real gdp growth was flat in the first quarter of 2012. available indicators for the second quarter of the year point to a weakening of growth and highlight prevailing uncertainty. looking beyond the short term, we continue to expect the euro area economy to recover gradually. however, ongoing tensions in some euro area sovereign debt markets and their impact on credit conditions, the process of balance sheet adjustment in the financial and non - financial sectors and high unemployment are expected to continue to dampen the underlying growth momentum. the june 2012 eurosystem staff macroeconomic projections for the euro area foresee annual real gdp growth in a range between – 0. 5 % and 0. 3 % for 2012 and between 0. 0 % and 2. 0 % for 2013. compared with the march 2012 ecb staff macroeconomic projections, the range for 2012 remains unchanged, while there is a slight narrowing of the range for 2013. in the governing council ’ s assessment, the economic outlook for the euro area is subject to increased downside risks relating, in particular, to a further increase in the tensions in several euro area financial markets and their potential spillover to the euro area real economy. bis central bankers ’ speeches downside risks also relate to possibly renewed increases in commodity prices over the medium term. euro area annual hicp inflation was 2. 4 % in may 2012, according to eurostat ’ s flash estimate, after 2. 6 % in the previous month. inflation is likely to stay above 2 % for the remainder of the year, mainly owing to developments in energy prices and indirect taxes. however, on the basis of current futures prices for commodities, annual inflation rates should fall below 2 % again in early 2013. looking ahead, in an environment of modest growth in the euro area and well - anchored long - term inflation expectations, underlying price pressures should remain subdued. the june 2012 eurosystem staff macroeconomic projections for the euro area foresee annual hicp inflation in a range between 2. 3 % and 2. 5 % for 2012 and between 1. 0 % and 2. 2 % for 2013. in comparison with the march 2012 ecb staff macroeconomic projections, there is a narrowing of the projection ranges for 2012 and 2013. the governing council continues to view the risks to the medium - term outlook for price developments as broadly balanced. upside risks per