inflation are above the target. this is about demand - side pressure, or to be more precise, about a considerable gap between the current level of demand and the potential of supply to meet such demand. it is not always possible to build up production capacities quickly. supply may adjust to demand more slowly due to limited capacities, a shortage of components and raw materials, logistics bottlenecks, and — with regard to the economy in general — due to the lack of a sufficient number of workers. it may take a long time to overcome these restrictions and ramp up supply. until these problems are solved, elevated demand will not turn into higher consumption, but will only translate into an increase in prices for those consumers who will be ready — or simply forced — to buy products at higher prices. all other consumers will be unable to purchase more expensive goods. this is exactly what we are observing now. the situation with cars is probably the most telling example. 1 / 4 bis central bankers'speeches excess demand, which cannot be met through an expansion of production, is not a source of additional economic growth. in such an environment, producers have the opportunity to easily pass their extra costs on to consumers. hence, this discourages companies to enhance production and labour efficiency. today, demand is fuelled by high inflation expectations. after the decrease in august and september, households ’ and businesses ’ inflation expectations are rising anew and have already returned to the peaks recorded in recent years. the longer inflation expectations stay elevated, the more we need to tighten our policy in order to bring inflation back to the target. we have considerably raised our inflation forecast for this year, as compared to july, namely to 7. 4 – 7. 9 %. we have also increased the forecast range of the annual average key rate for the next year by 1. 3 percentage points, as compared to july. considering such policy, inflation will decline to 4. 0 – 4. 5 % next year. i will now speak of the economic situation. except oil production subject to the opec + cuts, the economy generally bounced back to its long - term growth trends in the second quarter and even exceeded them in a number of industries. growth slowed down in the third quarter, which is evidence that the recovery had completed. it should be noted that the third quarter gdp was affected by a decrease in harvest and the worsened epizootic situation. excluding agriculture, we estimate that gdp growth quarter - on - quarter was positive. consumer demand remains the

jose manuel gonzalez - paramo : a strategic vision for statistics – challenges for the next ten years concluding remarks by mr jose manuel gonzalez - paramo, member of the executive board of the european central bank, at the 4th ecb conference on statistics “ a strategic vision for statistics – challenges for the next 10 years ”, frankfurt am main, 25 april 2008. * * * ladies and gentlemen, 1 it is a pleasure for me to have the opportunity to address such distinguished audience on the occasion of another stimulating and forward - looking ecb conference on statistics. as the executive board member in charge of the directorate general statistics, i would like to begin by thanking all the participants in this conference for their valuable contributions. at this stage, it is too early to provide a balanced summary of all the thoughtful written and oral contributions made at this conference. nevertheless, let me draw from the contributions that we have heard over the last two days in order to propose some elements of a strategic vision for statistics aiming to master the challenges for the next ten years. i would like to highlight three major developments, which i believe to be fundamental for our medium - to long - term strategy for statistics. ( 1 ) the first is globalisation, the term used to describe the growing interdependence of economies via trade, production and financial market linkages over recent decades. globalisation is a subject of great interest for monetary policy - makers, the reason for such interest being that it may – via a number of channels – affect key elements of the monetary policy framework, such as the inflation formation process and the monetary transmission mechanism, 2 and ultimately change the way central banks conduct monetary policy. 3 it has been even argued that globalisation may undermine the ability of national central banks to control the dynamics of domestic inflation, and ultimately lead central bankers to relinquish their autonomy in favour of some mechanism of coordination among national monetary policies. while these concerns may appear rather alarmist, 4 our knowledge of the different channels through which globalisation is changing our economies, and thereby potentially reducing the validity of the tools that we use to model their behaviour, is still rather limited. in addition, the events in credit and money markets since last august have reminded us that in a globalised world, disturbances may be transmitted more rapidly and through different channels than in the past. indeed, from its origin in the relatively small sub - prime segment of the us market for mortgage loans to its somewhat unusual dynamics of transmission ( for instance, the