The evolution of the eurozone economy and its macroeconomic forecasts will be “critically” affected by how the vaccination process develops and the implementation of the European stimulus program, said the president of the European Central Bank (ECB) Christine Lagarde, on the Reuters Next forum.
Likewise, despite the restrictions introduced in many countries in recent weeks, the Frenchwoman defended that in the last part of 2020 some uncertainties that threatened the prospects for the euro zone were cleared up, including Brexit, the political situation in the United States or the development of vaccines.
“From that point of view, the year has started in a more positive way than some want to see,” Lagarde said during his participation in the forum, where he recognized that, however, these advances do not imply that uncertainty has completely removed.
“How vaccination is developed, how quickly and efficiently we can move forward will be of critical importance when we look at the economic evolution and the forecasts,” said Lagarde, who secondly pointed out the influence that will have how European programs are implemented, such as the “Next Generation UE” fund.
“We have to move fast because we have a clear need for help, both from a fiscal point of view and from a monetary point of view, so the new EU fund must be implemented quickly, efficiently and based on strategic plans. that some countries have already sent, “he added.
Similarly, Lagarde defended that the most recent projections of the ECB, which contemplate a fall in GDP in 2020 of 7.3% and a growth of 3.9% in 2021, with a rebound of 4.2% for 2022 “remain clearly plausible ”, They contemplate the possibility that the confinements were extended during the first quarter of 2021.
Inflation and digital euro
Likewise, in reference to the strategic evaluation that the institution is carrying out, including the revision of its definition of price stability, Lagarde expressed the desire of the entity to achieve a degree of clarity and predictability in the inflation target, although he warned that, despite the low price levels registered in the euro zone in recent years, “inflation should not be ruled out”.
In this sense, the president of the ECB emphasized the importance of better reflecting the impact of the cost of housing when measuring inflation.
“I think it will not be a change from day to night, but reflecting housing costs more fully will go in the direction of better measuring prices and better helping Europeans on inflation expectations,” said the official.
Lagarde added that the ECB is closely monitoring the effect on prices that the evolution of the exchange rate may have, since the appreciation of the euro or the depreciation of the dollar can impact inflation, although it has reiterated that it is not an objective of the entity in itself.