European Central Bank President Christine Lagarde said on Thursday that there are tentative signs of stabilization in the euro area economy, while the novel coronavirus outbreak in China is a source of concern.
“While uncertainties surrounding the global economic environment remain elevated, those related to trade tensions between the United States and China are receding,” Lagarde said in a hearing at the European Parliament’s Economic and Monetary Affairs Committee.
“Other risks, however, are still lingering or – as for the uncertainty surrounding the impact of the coronavirus – are a renewed source of concern.”
Eurozone economy continues to grow, though at modest momentum, and remains relatively resilient, the ECB chief said.
The economy is being largely supported by domestically-oriented factors such as private consumption, employment, services and construction, she said. Meanwhile, global factors weigh on the euro area growth, Lagarde added.
The moderate growth is delaying the pass-through from wage increases to prices and hence, inflation remains subdued, she noted.
“The euro area economy therefore continues to require support from our monetary policy, which provides a shield from global headwinds,” Lagarde said.
Regarding the ECB strategy review, Lagarde said it has just started and it will be a thorough and intense process.
“Over the next 11 months, the dialogue between our institutions will be frequent and deep.”
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