Last month, the European Central expected economic growth of 3.9% this year in the euro zone, which includes 19 countries, assuming the gradual end of the pandemic.
But the increase in cases of Covid-19 disease again and the widespread increasing restrictions on movement and activity in countries including Germany and France, as well as the slow pace of vaccine distribution pose a challenge to expectations after only two weeks of 2021.
Lagarde adhered to the ECB’s expectations, although she said the bank had included some restrictions.
“I think our latest forecast in December is still quite reasonable,” she said during an interview at Reuters Next. “Our expectations are that the general isolation measures will continue until the end of the first quarter.”
The European Central said on December 10 that it expects to achieve “adequate” levels of herd immunity before the end of 2021.
In addition, Lagarde acknowledged that early vaccinations are “arduous” and one of the risk factors that must be monitored.
To support the eurozone, the central bank has already extended its very easy monetary policy until 2022, but with borrowing costs reaching record lows and entering negative territory in some eurozone countries, its remaining stimulus tools are limited.