Lagarde: It’s even worse than we thought
- European Central Bank President Christine Lagarde warned Wednesday the eurozone economy will “very likely” contract more than forecast after governments shut down business to contain the pandemic.
- The ECB now expects the euro club’s economy to shrink between 8 percent and 12 percent, depending on how fast lockdown measures are lifted and economic activity picks up. Earlier forecasts from the European Commission were below 8 percent.
- “It’s very likely that we’ll be somewhere in between the medium and the severe scenario,” Lagarde said in an online youth dialogue. Predictions of a mild contraction are “out of date.”
- New forecasts are due early next month, the Frenchwoman said, around the time eurozone governors convene for their next ECB monetary policy meeting.