Lagarde: Inflation To Rise In Medium Term As Pandemic Impact Fades

Having read out the monetary policy statement, Lagarde continues the press conference with economic analysis comments.

• Lagarde: Incoming data suggest economic activity may have contracted again in the first quarter. But it points to a resumption of growth in the second quarter.
• Surveys indicate that the manufacturing sector continues to recover. The services sector continues to be constrained by mobility restrictions. But there are signs of this bottoming. Consumers remain cautious.
• Over the medium-term, the recovery of the euro area economy will be driven by domestic and global demand, supported by favourable financing conditions and fiscal stimulus. While the near term risks are to the downside, medium term risks remain more balanced.
• Idiosyncratic factors underlying the recent rise in inflation will fade out next year.
• Once the impact of the pandemic fades, the unwinding of slack supported by monetary and fiscal policies will support a rise in inflation over the medium term.