Lagarde Says Pandemic Remains Risk but Expects Faster Recovery

President of the European Central Bank (ECB), Christine Lagarde, believes that the coronavirus pandemic is still impacting the Eurozone.

Speaking to the European Parliament on Monday, Lagarde expected a quick rebound in economic growth on the back of recovery in consumer spending, Reuters reported.

“While on the downside, the spread of virus mutations continues to be a source of risk, on the upside, brighter prospects for global demand and a faster-than-anticipated increase in consumer spending could result in an even stronger recovery.”

The ECB President still believes that now is not the time to raise interest rates, saying that tightening in the current circumstances would be premature, posing a risk to the ongoing economic recovery and the outlook for inflation.

“A sustained rise in market rates could translate into a tightening of wider financing conditions that are relevant for the entire economy.”

Speaking of the surge in inflation in the United States, Lagarde believes it would have limited and moderate impact on the European bloc.

Such impact could result from importing goods from the U.S., Lagarde was cited by Bloomberg as saying.