Lagarde: Economy To Slow Substantially, Likely To Increase Unemployment

ECB Pres Lagarde begins her press conference, discussing the economic outlook:

• We expect the economy to slow substantially for the remainder of the year.
• First, high inflation is dampening spending and production through the economy. These headwinds are reinforced by gas supply disruptions.
• The strong rebound in services will lose steam in the coming months.
• Third, the weakening in global demand in the context of tighter monetary policy in major economies and worsening terms of trade will mean less support for the euro area economy.
• Uncertainty remains high and confidence is falling sharply.
• At the same time the labour market has been robust and has supported economic activity.
• The slowing economy is likely to lead to some increase in the unemployment rate. Fiscal support to mitigate the impact of the energy price shock should be temporary and targeted.