Unpredictable Inflation: ECB's Christine Lagarde Highlights Global Economic Challenges
The European Central Bank President, Christine Lagarde, emphasized the growing unpredictability of inflation due to events like COVID-19 and the Ukraine conflict. Policymakers must consider extreme scenarios in their assessments. The ECB has set a 2% inflation target, with recent trends demonstrating the volatility in economic forecasts.
- Country:
- Germany
The head of the European Central Bank, Christine Lagarde, has warned of rising inflation unpredictability spurred by events such as the COVID-19 pandemic and Russia's incursion into Ukraine. The ECB must account for these extreme scenarios in their economic evaluations while ensuring transparent communication with the public, she stated.
Lagarde noted an increasing trend in supply disruptions, resulting in more frequent price adjustments by firms. This shift reflects a structural change under sustained uncertainty, transcending recent inflation surges in the US and Europe.
Despite threats of US tariffs adding to the economic unpredictability, the ECB remains committed to a 2% inflation target. The current annual price increase stands at 1.9%, and the central bank has responded by lowering its interest rate from 4% to 2%.
(With inputs from agencies.)
Google News