The ECB admits that the economic impact of coronavirus is a new "source of concern"


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The president of the European Central Bank (ECB), Christine Lagarde, said Wednesday that they see signs of stabilization of the Eurozone economy despite the fact that growth remains moderate and is subject to global risks, including doubts about the coronavirus impact.

In an appearance before the Eurocamara Economic Affairs Committee, Lagarde said the euro area economy continues to grow, although at a "still modest" pace, and stressed that the internal economy "remains relatively resilient" and that the sectors of services and construction "continue to resist well." He added, however, that "global factors weigh on the growth" of the Eurozone, although "there are provisional signs of stabilization."

Lagarde explained that some future indicators "are slightly more optimistic," in particular the PMI index which measures the expectations of the manufacturing sector, which has increased until reaching its maximum level in 18 months in January. In addition, although uncertainties in the global economy remain high, those linked to trade tensions between the United States and China are "remitting," he said.

The ECB president pointed out, however, that "other risks still persist or, as uncertainty about the impact of coronavirus, are a new source of concern. "

In this context, inflation levels remain weak, at 1.4% in January, and "therefore the eurozone economy continues to require the support of our monetary policy," Lagarde added. He added that the institution "will continue to closely monitor the possible side effects" of its measures, which include low interest rates and debt purchases.

On the other hand, the head of the European issuer defended that it is the "appropriate time" for the ECB carries out the review of its monetary policy strategy. Lagarde argued that since 2003, when it was last revised, "the economies of the euro area and the world have been experiencing profound structural changes."

The downward trend in growth, the decline in productivity and the aging of the population, together with the legacy of the financial crisis, have led to lower interest rates.

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