the second quarter. looking beyond the immediate disruption stemming from the coronavirus pandemic, euro area growth is expected to resume as the containment measures are gradually lifted, supported by favourable financing conditions, the euro area fiscal stance and a resumption in global activity. given the highly uncertain duration of the pandemic, the likely extent and duration of the imminent recession and the subsequent recovery are difficult to predict. however, without pre - empting the 2 / 4 bis central bankers'speeches forthcoming eurosystem staff macroeconomic projections, which will be published in june, growth scenarios produced by ecb staff suggest that euro area gdp could fall by between 5 % and 12 % this year, followed by a recovery and normalisation of growth in subsequent years. the extent of the contraction and the recovery will depend crucially on the duration and the success of the containment measures, how far supply capacity and domestic demand are permanently affected, and the success of policies in mitigating the adverse impact on incomes and employment. according to eurostat ’ s flash estimate, euro area annual hicp inflation decreased from 0. 7 % in march to 0. 4 % in april, largely driven by lower energy price inflation, but also slightly lower hicp inflation excluding energy and food. on the basis of the sharp decline in current and futures prices for oil, headline inflation is likely to decline considerably further over the coming months. the sharp downturn in economic activity is expected to lead to negative effects on underlying inflation over the coming months. however, the medium - term implications of the coronavirus pandemic for inflation are surrounded by high uncertainty, given that downward pressures linked to weaker demand may be partially offset by upward pressures related to supply disruptions. market - based indicators of longer - term inflation expectations have remained at depressed levels. even though survey - based indicators of inflation expectations have declined over the short and medium term, longer - term expectations have been less affected. turning to the monetary analysis, broad money ( m3 ) growth increased to 7. 5 % in march 2020, from 5. 5 % in february. money growth reflects bank credit creation for the private sector, which is driven to a large extent by drawing on credit lines, and low opportunity costs of holding m3 relative to other financial instruments, while heightened economic uncertainty appears to have triggered a shift towards monetary holdings, likely for precautionary reasons. in this environment, the narrow monetary aggregate m1, encompassing the most liquid forms of money, continues to be

provides additional information to financial institutions on how its supervisory approach is adjusting in light of the coronavirus, ” news release, march 24, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200324a. htm ; board of governors of the federal reserve system, federal deposit insurance corporation, and office of the comptroller of the currency, “ agencies announce two actions to support lending to households and businesses, ” news release, march 27, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200327a. htm ; board of governors of the federal reserve system, “ federal reserve board announces it will delay by six months the effective date for its revised control framework, ” news release, march 31, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200331a. htm ; board of governors of the federal reserve system, sr 20 - 9 : “ joint statement on interaction of the regulatory capital rule : revised transition of the cecl methodology for allowances with section 4014 of the coronavirus aid, relief, and economic security act, ” march 31, 2020, https : / / www. federalreserve. gov / supervisionreg / srletters / sr2009. htm ; board of governors of the federal reserve system, “ federal reserve board finalizes rule to extend by 18 months the initial compliance dates for certain parts of its single - counterparty credit limit rule, ” news release, may 1, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200501a. htm. 6 see, e. g., board of governors of the federal reserve system, federal deposit insurance corporation, and office of the comptroller of the currency, “ federal banking agencies provide banks additional flexibility to support households and businesses, ” march 17, 2020, https : / / www. federalreserve. gov / newsevents / pressreleases / bcreg20200317a. htm ; board of governors of the federal reserve system, “ federal reserve board announces technical change to support the u. s. economy and allow banks to continue lending