In 2009 the European Central Bank continued to operate as an anchor of stability and confidence in the challenging environment created by the global financial crisis. Following the severe intensification of financial market tensions in autumn 2008, the year 2009 started with a rapid and synchronised fall in economic activity worldwide. This was followed by a very gradual recovery in the course of the year, while inflation remained very low.
Overall, euro area real GDP contracted by 4.0% in 2009 and average annual inflation stood at 0.3%. At the same time, medium to longer-term inflation expectations remained firmly anchored in line with the Governing Council’s aim of keeping inflation rates below, but close to, 2% over the medium term. This reflects the high degree of credibility of the ECB’s monetary policy. […]
