+ A
A -
AFP
Frankfurt am Main
European Central Bank chief Christine Lagarde on Thursday said the eurozone economy faced an “unprecedented contraction” because of the coronavirus pandemic, and warned that the first signs of a rebound from easing lockdowns were “tepid”.
Hit hard by the containment measures that upended supply chains and depressed demand in recent months, the eurozone economy is expected to shrink 8.7 percent in 2020, Lagarde said.
As countries gradually begin to reopen, there are signs of the slump “bottoming out”, she said.
But “the improvement has been tepid compared with the speed at which economic indicators plummeted in the preceding months”, the former French finance minister added.
Unveiling updated forecasts taking into account the economic impact from the pandemic, Lagarde said the ECB expected economic growth to decline at a record pace in the second quarter of the year before a rebound gets under way.
The extent of this year’s recession would “depend crucially on the duration and effectiveness of containment measures” as well as policies to cushion the economic hit of the crisis, she said.
Looking to 2021, growth is expected to come in at 5.2 percent and 3.3 percent in 2022 -- boosted by massive stimulus from eurozone governments and the ECB.
The ECB also downgraded its inflation look, putting its aim of achieving an inflation target just below two percent even further out of reach.
The fallout from the pandemic is expected to cause inflation to slump to just 0.3 percent this year, down from an earlier forecast of 1.1 percent.
Price growth is expected to climb to 0.8 percent in 2021 and 1.3 percent in 2022.
“Over the medium term, weaker demand will put downward pressure on inflation,” Lagarde said.
Frankfurt am Main
European Central Bank chief Christine Lagarde on Thursday said the eurozone economy faced an “unprecedented contraction” because of the coronavirus pandemic, and warned that the first signs of a rebound from easing lockdowns were “tepid”.
Hit hard by the containment measures that upended supply chains and depressed demand in recent months, the eurozone economy is expected to shrink 8.7 percent in 2020, Lagarde said.
As countries gradually begin to reopen, there are signs of the slump “bottoming out”, she said.
But “the improvement has been tepid compared with the speed at which economic indicators plummeted in the preceding months”, the former French finance minister added.
Unveiling updated forecasts taking into account the economic impact from the pandemic, Lagarde said the ECB expected economic growth to decline at a record pace in the second quarter of the year before a rebound gets under way.
The extent of this year’s recession would “depend crucially on the duration and effectiveness of containment measures” as well as policies to cushion the economic hit of the crisis, she said.
Looking to 2021, growth is expected to come in at 5.2 percent and 3.3 percent in 2022 -- boosted by massive stimulus from eurozone governments and the ECB.
The ECB also downgraded its inflation look, putting its aim of achieving an inflation target just below two percent even further out of reach.
The fallout from the pandemic is expected to cause inflation to slump to just 0.3 percent this year, down from an earlier forecast of 1.1 percent.
Price growth is expected to climb to 0.8 percent in 2021 and 1.3 percent in 2022.
“Over the medium term, weaker demand will put downward pressure on inflation,” Lagarde said.
