ECB's president Lagarde: Incoming data suggest more pronounced near term impact of the pandemic
10.12.2020, 14:04

ECB's president Lagarde: Incoming data suggest more pronounced near term impact of the pandemic

  • Eurozone's economy is seen shrinking in Q4
  • The depth and duration of the second coronavirus wave is bigger than expected
  • Q4 GDP growth seen at -2.2%
  • Service sector activity is severely curbed
  • Inflation remains very low
  • PEPP envelope needs not be used in full
  • Envelope can be recalibrated if needed
  • ECB sees 2020 GDP growth at -7.3% vs. -8% seen in September
  • Sees 2021 GDP growth at 3.9% vs. 5% seen in September
  • sees 2022 GDP growth at 4.2% vs. 3.2% seen in September
  • Sees 2023 GDP growth at 2.1%
  • Says risks to growth remain to the downside, but have become less pronounced
  • ECB sees 2020 inflation at 0.2% vs. 0.3% seen in September
  • Sees 2021 inflation at 1.0% vs. 1.0% in September
  • Sees 2022 inflation at 1.1% vs. 1.3% seen in September
  • Says fiscal message should be targeted, temporary
  • Risks of delayed recovery warrants fiscal support
  • ECB doesn't target the exchange rate
  • Euro appreciation is important, puts downward pressure on prices
  • ECB will very carefully monitor the exchange rate


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