Global economic activity has continued to improve since April, owing to sustained progress in vaccination efforts and supporting economic policies. The speed of recovery, however, remains varied across sectors and countries. The emergence of the Delta variant and supply bottlenecks cast a shadow over the global economy's near-terms growth prospects. It is essential that policy support is not removed prematurely.

Despite supply bottlenecks and uncertainty regarding COVID, the euro area’s economic recovery is increasingly advanced. The risks surrounding the euro area growth outlook are fairly balanced in the medium term.

We urge additional IMF members to join voluntary SDR trade agreements in order to promote SDR exchanges and guarantee that the burden is appropriately spread among a broader group of nations.

Inflation has increased noticeably since the start of 2021, and we anticipate it to increase further over autumn. We view this upswing as largely being driven by temporary factors, such as the strong recovery in oil prices and cost pressures stemming from materials and equipment shortages. However, price pressures might become more persistent if supply bottlenecks remain longer or salaries grow faster than presently projected.

In order to increase confidence and minimise uncertainty, positive financial conditions need to be preserved over the pandemic period. The Governing Council regularly readjusts the net purchases under the PEPP, based on a combined evaluation of financing conditions and the inflation outlook.