2/3, 2:44 PM (Source: TeleTrader)
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Lagarde: Inflation likely to remain high in near-term

European Central Bank (ECB) President Christine Lagarde stated at a press conference on Thursday that inflation is likely to remain high in the near term as the increasing energy costs continue to "push up" prices across different sectors.

Lagarde noted that inflation in the Eurozone, which came in at 5.1% in January, will likely stay elevated "for longer than expected" but eventually decline throughout 2022. She stressed the ECB will take all the necessary measures to help that figure go below 2% and remain there "durably." Speaking of higher energy prices, Lagarde admitted that they are currently "reducing the purchasing power of households" but also added that there are indications of "moderation" in those costs over 2022. She pointed out that "we need more than ever" monetary policy to remain flexible for the ECB to respond to the ongoing upward trend in inflation.

Lagarde also remarked the growth of the euro area's economy remained "subdued" in the first quarter of the year and then went on to project it will "pick up strongly" later in 2022. She stressed that the output is "affected less and less by each wave" of the COVID-19 pandemic despite "containment measures affecting consumer services." Lagarde encouraged households to aid the recovery by becoming "more confident" and saving less, as the return of the economy to its pre-pandemic level should lead to a growth in wages.

Baha Breaking News (BBN) / JR