Germany: ECB's Lagarde warns of 5% to 12% plunge in eurozone economy in 2020

Christine Lagarde, president of the European Central Bank (ECB), said that the eurozone economy might shrink between five and 12 percent in 2020, during an online news conference that was held in Frankfurt on Thursday. «Survey indicators for consumer and business sentiment have plunged, suggesting a sharp contraction in economic growth and a profound deterioration in labour market conditions... Еще,» said Lagarde. «Given the high uncertainty surrounding the ultimate extent of the economic fall out, growth scenarios produced by ECB staff suggest that euro area GDP could fall by between five and 12 percent this year.» The ECB president added that the plunge is dependent on the duration of «containment measures» and the success of policies «to mitigate the economic consequences for businesses and workers.» Lagarde pledged to be prepared to do «everything necessary within its mandate to support all citizens of the euro area» through the coronavirus pandemic. According to the ECB, the GDP decreased by nearly four percent in the first quarter of 2020, despite only being partially affected by the coronavirus outbreak. The lockdown measures in the last weeks of the first quarter, and the «sharp downturn» in April's economic activity suggest that it's «impact is likely to be even more severe in the second quarter.» «The Governing Council is determined to continue to support households and firms in the face of the current economic disruption and heightened uncertainty in order to safeguard medium-term price stability,» continued Lagarde. She added that the ECB is «fully prepared to increase the size of the Pandemic Emergency Purchase Programme (PEPP)» as well as to «adjust its composition by as much as necessary and for as long as needed.»

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