Lagarde, ECB President: "Eurozone Economy Could Shrink Up to 12% Due to COVID-19"

▲Christine Lagarde, President of the European Central Bank (ECB) [Image source=Reuters News Agency]

[Asia Economy Reporter Kwon Jae-hee] Christine Lagarde, President of the European Central Bank (ECB), forecasted on the 30th (local time) that the Eurozone (19 countries using the euro) economy could contract by 5 to 12% this year due to the impact of the spread of the novel coronavirus disease (COVID-19).

At the monetary policy meeting held at the ECB headquarters in Frankfurt, Germany, Lagarde stated, "The economy is declining at an unprecedented scale and speed in history."

She added, "The extent of the economic contraction will depend on the duration of public life restrictions to prevent the spread of COVID-19 and policies to stop transmission," and said, "As restrictions are gradually eased, economic activity will begin to recover."

Lagarde's remarks came after Eurostat announced that the Eurozone economy is expected to shrink by 3.8% in the first quarter. Eurostat also reported that the Eurozone unemployment rate in March rose by 0.1 percentage points from the previous month to 7.4%.

Lagarde predicted, "The shock is expected to be greater in the second quarter," and "The Eurozone economy can recover next year."

In particular, she referred to the ECB's 750 billion euro Pandemic Emergency Purchase Programme (PEPP) as "the best tool we can take" in response to COVID-19, suggesting the possibility of extending this program into next year.

This content was produced with the assistance of AI translation services.