we may mention the various measures approved in recent years, including most notably the start - up of the banking union. yet a series of more transitory – though persistent – factors has also contributed decisively to the momentum of the recovery. these factors include the role played by the ecb ’ s monetary policy and the implementation of an expansionary fiscal policy in recent years, combined with the significant reduction in oil prices from mid - 2014 to early 2016 and, subsequently, the improvements in external markets. 6 / 14 in respect of monetary policy, the various ecb measures have allowed financial conditions to be eased considerably, and have acted as a mainstay for the economic recovery in the area, contributing to countering the deflationary trends looming over the region some years back. for the spanish economy, it is estimated that from 2014 to 2018 the ecb ’ s measures boosted real gdp by 2. 3 % and the cpi by 1. 4 % ( see chart 11 ). these effects are of a fairly similar magnitude to those estimated for the euro area as a whole ( 2. 3 % and 1. 7 %, respectively ). the fiscal policy stance shifted from expansionary in 2015 and 2016 to neutral in 2017, but it will once again be expansionary in 2018 once the various measures included in the state budget for this year materialise. over recent years, the reduction in the deficit has been due to the economy ’ s cyclical improvement and to the fall - off in interest expenditure, while the structural deficit has held at still - high levels, according to the european commission ’ s latest estimates. that said, the role of the foregoing factors should, in future, tend progressively to taper off. this has been the case already for oil prices, the course of which has reversed since mid2017, and, to a lesser extent, of external markets, following the recent slowdown. but it is particularly relevant for demand - side ( monetary and fiscal ) policies. specifically, it is to be expected that monetary policy will progressively play a less pivotal role. with the advance of the euro area economy ’ s position in the cycle, according to the ecb ’ s latest estimates, there will be a progressive pick - up in inflation levels to close to 2 % in the coming years. indeed, at its meeting on 14 june, the ecb ’ s council reached the conclusion that the progress to date towards a sustained adjustment of inflation has been substantial, which gave rise to a

glenn stevens : the lucky country address by mr glenn stevens, governor of the reserve bank of australia, to the anika foundation luncheon, supported by australian business economists and macquarie bank, sydney, 24 july 2012. * * * the anika foundation raises funds to support research into adolescent depression and suicide. see : < http : / / www. anikafoundation. com / >. i thank mark hack for assistance in preparing these remarks, and ryan fox for help in understanding the difficulties in comparing dwelling prices across countries. thank you for coming today to support the anika foundation. before i proceed i want also to thank macquarie bank for their support, once again, in providing today ’ s venue and sustenance, and the australian business economists for their continuing organisational support for these annual functions. it is slowly becoming better recognised that the australian economy ’ s relative performance, against a very turbulent international background, has been remarkably good. many foreign visitors to australia comment on this relative success and i have noticed an increase in the number of foreign companies interested in investing in australia as a result, notwithstanding our domestic tendency towards the “ glass half empty ” view. but some observers – admittedly not the majority – still harbour concerns about the foundations of recent economic performance and question the basis for confidence about the future. there are several themes to these doubts, but the common element is that recent relative success owes a certain amount to things that will not continue – to luck – and that our luck may be about to turn. rapid growth in chinese demand for resources, for example, has been of great benefit to date, but what if the chinese economy suffers a serious downturn? another potential concern is dwelling prices. australia saw a large run up in dwelling prices and household borrowing until a few years ago. some other countries that saw this subsequently suffered painful corrections and deep recessions, associated with very stressed banking systems. can australia escape the same outcome? a further theme is the focus on the funding position of australian financial institutions, insofar as they raise significant amounts of money offshore. could this be a weakness, in the event that market sentiment turns? actually, this is another version of the old concern about the current account deficit : what will happen if markets suddenly do not want to fund our deficit? it has long been a visceral fear among australian officials and economists that global investors will suddenly take a dim view of us. the same sorts of concerns of organisations such as the international monetary fund