Lagarde Vows to Keep Inflation Anchored at ECB Target

(New York=Yonhap Infomax) Jin Woo Choi – Christine Lagarde, President of the European Central Bank (ECB), stated on the 21st (local time), "We will continue to adjust policy as needed to ensure that inflation remains at our target."

Speaking at the European Banking Congress in Frankfurt, Lagarde emphasized, "The ECB is fulfilling its role by delivering price stability."

Lagarde also expressed concerns regarding Europe's economic growth.

She noted, "Europe has become more vulnerable. One reason is our reliance on third countries for security and critical raw materials," adding, "Rising U.S. tariffs, Russia's invasion of Ukraine, and intensifying competition with China have all amplified global shocks."

Lagarde pointed out that while Europe has historically grown through exports, "Openness has become a vulnerability. Exports are now a far less reliable engine of growth, reflecting the changed global environment."

"In mid-2023, the ECB expected European Union (EU) exports to increase by about 8%, but there was no increase at all," she said. "Over the next two years, exports are projected to make a negative contribution to growth."

Lagarde added, "We have cut rates by 200 basis points from their peak, which is gradually delivering more accommodative financial conditions and helping to support demand."

She continued, "The current defense and infrastructure fiscal packages are being implemented at an appropriate time for Europe and will have a visible impact on growth. The ECB estimates that if government investment increases between now and 2027, about one-third of the trade shock will be offset."

jwchoi@yna.co.kr

(End)