The rise in inflation in the eurozone is of little concern to ECB President Christine Lagarde.
According to ECB President Christine Lagarde, the billion dollar aid package to support the US economy will also have an impact on the European economy. “There will be some effects,” said Lagarde on Thursday after the interest rate meeting in Frankfurt. “That's pretty clear.” This applies to foreign trade, for example, as well as to inflation expectations. The ECB will take this into account in its future forecasts.
With the 1.9 trillion dollar (1.60 trillion euros) economic stimulus package from US President Joe Biden, the consequences of the corona pandemic are to be cushioned in the USA and the economy is boosted.
Lagarde is relaxed about the expected rise in inflation in the euro area this year. It is possible that the rate could reach two percent by the end of the year, she said on Thursday at the press conference after the interest rate meeting. But the ECB will “see through” this development.
The increase is expected to be temporary and will not lead to a fundamental rise in prices. The prerequisites for this were lacking in the economy, which was underutilized due to the consequences of the pandemic, also because wage pressure could not build up under these conditions.
ECB expects 1.5 percent inflation
The ECB economists expect consumer prices to rise by 1.5 percent this year. As recently as December, the forecast was 1.0 percent. 1.2 (1.1) percent are forecast for 2022 and 1.4 percent for 2023, unchanged.
In February, as in January, inflation in the euro area was 0.9 percent. Previously, consumer prices had fallen for several months in a row in the wake of the pandemic. But annual inflation is likely to increase significantly in the next few months – mainly due to rising energy costs. Because from spring 2020, the virus crisis had hit large parts of the global economy, which had led to a decline in energy demand.
