The strength of the economic recovery in the Euro area remains surrounded by uncertainty, as it continues to be highly dependent on the future of the pandemic, the head of the European Central Bank (ECB) said Thursday.
Christine Lagarde said the bank decided to reconfirm its accommodative monetary policy stance following a monetary policy meeting on interest rates where a decision was made to keep interest rates stable, complying with market expectations.
She noted Euro area domestic demand showed a significant recovery from low levels, although elevated uncertainty about the economic outlook continues to weigh on consumer spending and business investment.
“Headline inflation is being dampened by low energy prices and weak price pressures in the context of subdued demand and significant labor market slack,” she added.
Lagarde made it clear that the Euro economy should be supported by favorable financing conditions, an expansionary fiscal stance and a strengthening in global activity and demand.