mario draghi : imfc statement statement by mr mario draghi, president of the european central bank, at the thirty - ninth meeting of the international monetary and financial committee, washington dc, 12 april 2019. * * * the euro area economy expanded at a slower pace in 2018, following robust growth in the previous year. the economy grew by 1. 9 % in year - on - year terms, marking a sizeable moderation in the pace of economic expansion. while there are signs that some of the idiosyncratic domestic factors dampening growth are fading, global headwinds continue to weigh on euro area growth developments. the persistence of uncertainties, related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, is leaving marks on economic sentiment. at the same time, the economy continues to exhibit a high level of capacity utilisation, and the unemployment rate in the euro area has continued its downward trend, falling to its lowest level since october 2008. the number of people in employment has increased by more than ten million since mid - 2013. nevertheless, since the annual meetings in october 2018, incoming data have been weak, in particular in the manufacturing and tradable goods sectors, reflecting a slowdown in external demand. this was compounded by some country and sectorspecific factors that are turning out to have somewhat longer - lasting effects than previously expected. our monetary policy measures continue to support domestic demand, which remains the backbone of the euro area ’ s economic growth. private consumption is driven by employment gains and rising wages. although business investment has lost some momentum, economic fundamentals remain supportive ; high levels of capacity utilisation, together with favourable financing conditions and robust demand, are expected to continue to further support investment. in addition, the expansion in global activity is expected to continue, although at a slower pace. since the annual meetings, short - term economic projections have been revised downwards. the latest ecb staff projections put annual real gdp growth at 1. 1 % in 2019, 1. 6 % in 2020 and 1. 5 % in 2021. at the same time, the persistence of uncertainties related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets poses downside risks to the euro area growth outlook. headline inflation in the euro area has lately been hovering around 1. 5 %, somewhat lower than in the summer of last year, when it was around 2. 0 %

) for all items excluding fresh food rose to 2. 4 percent last summer due mainly to the rise in crude oil prices, but declined thereafter to around 0 percent reflecting the decline in prices of petroleum products and the stabilization of food prices. looking ahead, the year - on - year rate of decline in the cpi ( excluding fresh food ) will likely accelerate through the middle of this fiscal year reflecting the deterioration in demand conditions in addition to the fact that the level of cpi at this time last year was elevated due mainly to the rise in prices of petroleum products and food. thereafter, however, assuming that medium - to long - term inflation expectations remain stable, the rate of decline in the cpi ( excluding fresh food ) is likely to moderate as the effects of the changes in the prices of petroleum products abate. the above projections regarding future economic activity and prices continue to be attended by considerable uncertainties. those that demand attention are the downside risks. the bank will continue to carefully monitor developments in economic activity and prices bearing in mind these downside risks. iii. financial conditions developments in the world economy and in global financial markets are the major downside risks to japan's economy, but i have already elaborated on them and i will now turn to japan's financial conditions. from last autumn, the effects of the financial crises in the united states and europe spread to financial markets in japan. in the money market, tensions increased as can be observed in wider spreads between interbank funding rates and short - term government security rates. the issuing conditions for cp and corporate bonds sharply deteriorated. the initial cause of the recent tightening in financial conditions was the global credit contraction. therefore, the recent changes in financial conditions are characterized by the sharper deterioration in financial positions of large firms than in those of small firms. the heightened pressures in the global financial and capital markets directly affected the financial positions of large firms through increased difficulty in raising funds from foreign banks and from the domestic cp and corporate bond markets. large firms increased the volume of borrowing from banks and tried to hold ample liquidity at hand due to increased concerns over future financial conditions. the deterioration in financial positions of large firms negatively influenced the financial positions of small firms through various channels. in view of these assessments, the bank took aggressive policy actions in order to provide abundant liquidity in the money market and to facilitate corporate financing. these actions include the outright purchases of cp and corporate bonds. although cp and corporate bonds are fund - raising tools used mainly by large firms