European Central Bank President Christine Lagarde underlined on Friday that far-too-high inflation in the region is likely to remain above the bank's target for an "extended period of time," adding that policymakers will pursue interest rate hikes in the upcoming meetings based on impending economic data.
Additionally, the central bank's president explained that high inflation, weakening global demand, and declining confidence have dampened the euro area's GDP, and are likely to contract it further the in the second half of the year and early 2023. "[...] Risks to growth are primarily on the downside, particularly because of the economic consequences of the war in Ukraine," Lagarde stated.
In her remarks at the 46th meeting of the International Monetary and Financial Committee, Lagarde pointed out that the raging inflation in the euro area has been led by rising energy prices, and that the war in Ukraine has caused disruptions in global food chains, adding to inflationary pressures globally.
