ECB’s Lagarde: Economy ‘May Have Softened Again’ in 2H 2024

25 October 2024

ECB’s Lagarde: Economy ‘May Have Softened Again’ in 2H 2024
Christine Lagarde, president of the ECB, at the Governing Council meeting in Ljubljana on October 17, 2024. Photo by Andrej Hanžekovič/ECB.

By Marta Vilar – WASHINGTON (Econostream) – European Central Bank President Christine Lagarde said on Friday that the Eurozone economy might have weakened further in the second part of 2024 due to geopolitical factors.

In a speech at the meeting of the International Monetary and Financial Committee in Washington, Lagarde said, ‘Risks to growth remain tilted to the downside.’

Weaker confidence could delay the recovery of consumption and investment, she said.

‘Looking ahead, we expect inflation to temporarily increase again in the fourth quarter of this year as the previous sharp falls in energy prices drop out of the annual rates’, she said.

According to Lagarde, inflation should fall again after Q4 2024, and the 2% target would be reached ‘next year’.

Inflation should hit 1.9% on average in 2026, as stated in the ECB's September macroeconomic projections, she said.

‘The labour market remains resilient, but indicators point towards cooling labour demand on the back of weaker economic activity’, she said.

Employment growth had decelerated in the second quarter of 2024 compared to the previous one, she said.