ECB’s Lane: Not So Clear Yet When Consumer Confidence to Return Entirely
24 March 2021By David Barwick – FRANKFURT (Econostream) – It remains an open question when consumers will be as confident as they were before the pandemic, European Central Bank Executive Board member Philip Lane said on Wednesday.
In a conversation with economics students posted to YouTube, Lane, who is also chief economist, said that ‘once we contain the virus through vaccinations and other medical solutions, there should be a fairly strong bounce back of the economy.’
‘But what is true is whether you get a 100% full recovery depends on confidence’, he continued. ‘And … it’s not so clear, it remains a debate for consumers about when will they be fully confident.’
Though the economy may already be snapping back in the U.S., in Europe, given the experience of protracted stagnation after the Global Financial Crisis, it ‘may take time for that to happen’, he said.
Confident consumers being necessary for a strong return of investment, he said, it may ultimately come down to whether the recovery is 100% or 95%, ‘but those five percentage points make a big difference.’
In other comments, Lane said that ‘we will at some point face a situation of, we’re going to need fiscal policy to support a reduction in the debt ratio.’