“The eurozone economy continues to recover and the labor market is improving with the help of supportive policies,” she said. European Central Bank, Christine Lagarde, during the press conference following the meeting of the Governing Council of the ECB.
“Growth is moving at a slower pace but the ECB expects economic activity to pick up again over the next year,” she said, adding that the latest wave of pandemics and the Omicron mutation have prompted some countries to resume stricter restrictive measures.
He went on to say that energy prices have risen sharply and that some industries are short of materials, equipment and manpower. “These factors limit economic activity and are the opposite wind for the economic outlook,” he said, adding that although the health crisis continues, many people have been vaccinated and societies as a whole are better able to deal with coronavirus, reduce the impact of the pandemic on the economy.
For Omicron, Lagarde pointed out that we still do not know much about the new mutation and it is not possible to calculate what its impact will be.
Regarding inflation, he stressed that it is expected to remain at high levels in the short term but will decline over the next year. The inflation outlook has been revised upwards but inflation is expected to remain below the 2% target.
At the same time, he said that bond purchases will stop shortly before interest rates rise.
The President of the ECB said that with the current conditions it is very difficult to have an increase in interest rates in 2022.
In forecasts for the eurozone economy, the head of the ECB said that it will run by 5.1% in 2021, 4.2% in 2022, 2.9% in 2023 and 1.6% in 2024. Compared to September , the forecasts have been revised downwards for 2022 and upwards for 2023.
Inflation will reach 2.6% in 2021, 3.2% in 2022, 1.8% in 2023 and 1.8% in 2024, higher than the ECB forecasts in September.
Lagarde pointed out that there was a large majority for the decisions taken by the Board, but there were some members who disagreed.
For Greece, he pointed out that it has made real progress in the reforms lately, improved its rating but does not yet have the rating that makes it eligible for purchases by the ECB from the APP purchasing program, so the specific reference was made in its text. He added that it was a strong signal and that the move was well received by the Council.