Risks surrounding the euro area growth outlook remain tilted to the downside, but are now less pronounced, the European Central Bank President Christine Lagarde said Thursday.
"The news about the prospects for the global economy, the agreement on future EU-UK relations and the start of vaccination campaigns is encouraging, but the ongoing pandemic and its implications for economic and financial conditions continue to be sources of downside risk," Lagarde said in the introductory statement to her post-decision press conference. Amid the resurgence in the coronavirus infections, economic activity is being disrupted in many countries, she noted. Services sector activity is being severely curbed, albeit to a lesser degree than during the first wave of the pandemic in early 2020, she said. Weak demand and significant slack in labor and product markets suggest that inflation is set to remain very weak in the near term, the ECB chief said. "Uncertainty remains high, including relating to the dynamics of the pandemic and the speed of vaccination campaigns," Lagarde said. "We will also continue to monitor developments in the exchange rate with regard to their possible implications for the medium-term inflation outlook."
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.