FXstreet.com (Barcelona) - The Euro Area, according to the latest ECB bulletin is facing a protracted period of high annual inflation resulting from rising prices of food and energy, although the economic fundamentals in the Euro Areas are sound and the main macroeconomic indicators show moderate but continuous economic growth in the European Monetary Union.
Gross Domestic Product increased 0.4% in the last quarter of 2007 in the Euro Area, following a 0.7% increase in the previous quarter. Domestic and foreign demand will support ongoing GDP growth in 2008 although at a slower pace than in the previoius year. In regards to external demand, world economy is expected to remain resilient, but emerging economies will contribute to global economic growth.
The Bank, anyway, adverts about the level of unusually high level uncertainty resulting from the turmoil in financial markets, and the fact that tensions might remain for a longer than expected time.
In this landscape, the Bank affirms its commitment to maintain price stability in the medium term as its primary objective, in this sense, the government believes that the monetary policy is the main instrument to achieve that goal. The Governing Council, according to the bulletin, will continue to monitor very closely all developments over the coming week.