narrative of a continued broad - based expansion is echoed in the latest september 2018 staff projections. real gdp is projected to grow at an annual rate of 2. 0 % in 2018, 1. 8 % in 2019 and 1. 7 % in 2020. while risks to growth remain broadly balanced, those related to global factors, including the threat of increased protectionism, the finalisation of the brexit negotiations and vulnerabilities in emerging markets are gaining prominence. turning to inflation developments, euro area headline inflation reached 2. 1 % in september 2018, up from 2. 0 % in august 2018, which largely reflects higher energy costs. based on the latest oil futures prices, headline inflation is expected to remain around the current level for the remainder of the year. according to the latest september 2018 staff projections, inflation is expected to rise to 1. 7 % in 2018, 2019, and 2020, which is unchanged since the june exercise. the stable path masks changes in inflation components, with the decline in the contribution of the energy component over the projection horizon expected to be offset by the gradual increase in underlying inflation. 1 / 2 bis central bankers'speeches while measures of underlying inflation remain generally subdued, they are increasing from previous lows. as the labour market continues to tighten this should lead to higher nominal wage growth, which in turn should support underlying inflation. overall, we remain confident that the underlying strength of the euro area economy will continue to support the gradual build up of price pressures in order for inflation to return to levels below, but close to, 2 %. yet, much of the medium - term increase in inflation that we predict is based on the premise of quite some degree of monetary policy accommodation. against this backdrop, this month we began reducing our monthly net asset purchases to €15 billion and we continue to anticipate that – subject to incoming data confirming the medium - term inflation outlook – net purchases will cease at the end of this year. that being said, in order to ensure that a sufficient degree of monetary accommodation continues to support the further build - up of headline inflation, the governing council decided to : reconfirm its forward guidance on the likely path of our policy interest rates, whereby rates are expected to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2 % over the medium term ; restate the intention to continue to

in terms of rising living standards and overall prosperity should not be taken for granted though since globalisation and rising capital mobility require taking into account the possibility of shocks spilling over into different countries. the financial crises that we have witnessed over the last 25 years and that were largely confined to emerging market and developing countries have not been few : the debt crises during the 1980s that started with poland and mexico and spread to latin america, africa, the middle east and the soviet union ; some years later, the mexican crisis in 1994 ; the asian crisis starting in 1997 ; the russian crisis in 1998 ; and the argentinian crisis in 2001 - 02. as is well known, the composition of private capital flows to emerging market and developing countries in the periods before and after the crisis of the 1980s differed substantially. looking at world bank global development finance data, from the 1973 oil price shock until the 1982 mexican crisis bank lending amounted to almost two thirds of overall private capital flows, dwarfing bond financing and equity flows, which stood at below 5 percent and 17 percent respectively. this composition of private capital flows changed dramatically in the 1990s. in the period between 1990 and 1997, while bank lending made up only 12 percent, fdi and portfolio equity flows as well as bond financing combined had risen to an impressive 80 percent of overall private capital inflows. in hindsight, the 1989 brady plan of collateralized debt reduction could be seen as paramount in paving the way for these significant changes. that said, and irrespective of whether the crisis took place in the 1980s or 1990s, all of these crises have in common that they not only imposed major macroeconomic costs on emerging market countries and led to significant financial losses on the part of commercial banks and bond holders in mature economies. these events posed also major threats to the international financial system. what is important to note, though, is that the international community managed to resolve all of these crises. this was so because the international institutions and forums that are charged with crisis resolution were up to their responsibilities. moreover, measures were taken by sovereigns in emerging market countries and the private sector in mature economies to fight these crises. going forward, an important lesson that we have learned from these events is that our efforts aimed to strengthen the global financial architecture need to continue tirelessly to ensure that the resilience of the global financial system is preserved. updating the effectiveness of this architecture in the areas of crisis prevention and crisis management is an ongoing task, and many crucial steps have been