The European Central Bank (ECB) has revised upwards the growth outlook for the Eurozone economy, with president Christine Lagarde admitting that the central bank is more optimistic than it was a few months ago. Still, it will keep a “firm hand” on stimulus policy to avoid holding back the recovery.
According to the forecasts advanced on Thursday by Lagarde, the single currency bloc is expected to grow by 4.6% this year and 4.7% in 2022, an improvement of 0.6 percentage points (p.p.) on March projections. For 2023, the central bank’s outlook is unchanged: economic activity will grow by 2.1%,
“We spend a lot of time looking at the quarterly projections and we go deeper into each of the items. I could say we are a little more optimistic about the economic outlook than we were three months ago. The latest signal we are getting is of a strong recovery in the second quarter and hopefully (this) will be amplified in the third quarter,” the ECB president admitted this Thursday at the press conference after the monetary policy meeting.
The central bank’s technical staff also reported an acceleration in prices in the region, although still below the ECB’s mandate target of “close to but below 2%”. “We are far from our goal. We are certainly not where we would like to be when the pandemic is over,” Lagarde emphasised.
The inflation rate will stand at 1.9% this year (down from the 1.5% projected in March), dropping to 1.5% in 2022 and 1.4% in 2023.