business
Thursday Jan 20 2022
By
Reuters

Inflation drivers in euro zone will ease gradually in 2022: ECB's Lagarde

By
Reuters
European Central Bank President Christine Lagarde addresses the European Parliament during a debate on the 2018 annual report of the ECB in Strasbourg, France, February 11, 2020. — Reuters/File
European Central Bank President Christine Lagarde addresses the European Parliament during a debate on the 2018 annual report of the ECB in Strasbourg, France, February 11, 2020. — Reuters/File

  • Christine Lagarde says the cycle of economic recovery in US is ahead of that in Europe.
  • "Inflation will stabilise and ease gradually in the course of 2022," she says.
  • Bank head adds ECB do not need to act as boldly as US Fed because of a different economic situation.


PARIS: Inflation in the euro zone will decrease gradually over the year as its main drivers, such as surging energy prices and supply bottlenecks, are expected to ease, European Central Bank (ECB) head Christine Lagarde told France Inter radio.

"This will stabilise and ease gradually in the course of 2022," she said.

Asked on her policy to counter price pressures, Lagarde reiterated that the ECB did not need to act as boldly as the US Federal Reserve because of a different economic situation.

"The cycle of the economic recovery in the US is ahead of that in Europe. We thus have every reason not to act as rapidly and as brutally that one can imagine the Fed would do," she said, adding that inflation, too, was higher in the US.

"But we have started to react and we obviously are standing ready, to react by monetary policy measures if the figures, the data, the facts demand it," she said.

In the interview, Lagarde also commented on recent trends in euro zone yields as Germany's 10-year Bund, viewed as the primary benchmark, rose above 0% for the first time since 2019.

"If the yields rise again, this means that the fundamentals of the economy are improving", Lagarde said.