Christine Lagarde, President of the European Central Bank (ECB) said on Wednesday that she is confident of the economic recovery in the eurozone this year, provided that the general lockdown measures taken to confront the corona pandemic be lifted and the vaccines are distributed at the end of March.
Last month, ECB expected economic growth of 3.9% this year in the eurozone, which includes 19 countries, assuming the gradual end of the pandemic.
However, the increase in cases of COVID-19 in its second wave and the widespread increasing restrictions on movement and activity in countries including Germany and France, as well as the slow pace of the distribution of vaccines, all challenge expectations after only two weeks of 2021.
Lagarde adhered to the ECB’s forecast on Wednesday, although she said the bank had included some restrictions. “I think our latest forecast in December is still very reasonable,” she said in an interview with Reuters.
The Central Bank said on December 10 that it expects to achieve “adequate” levels of herd immunity before the end of 2021. Lagarde acknowledged that early vaccinations are “strenuous” and one of the risk factors that need to be monitored.
To support the eurozone, the central bank has already extended its monetary easing policy until 2022 but, with borrowing costs reaching record lows and entering negative territory in some eurozone countries, its remaining stimulus tools are limited.