Lagarde: Eurozone Economy Has Proved More Resilient Than Expected

Lagarde opens her press conference by reading the policy statement as usual, then moves into her discussion of the economic landscape:

• The euro area economy has slowed markedly since mid-2022 and we expect it to remain subdued in the near term. Geopolitical uncertainty continues to act as a headwind to growth.
• Together with high inflation and tighter financing conditions, these headwinds dampen spending in the manufacturing sector. Supply bottlenecks are easing, the supply of gas is more secure, confidence is improving and firms are working off backlogs.
• Output in the services sector has held up, supported by reopening effects and demand for leisure activities.
• Rising wages and the decline in energy price inflation have eased the loss of purchasing power. This will support consumption. The economy has proved more resilient than expected and should recover in the coming quarters.