Lagarde: 2020 eurozone GDP revised for the better at -8%. Economic activity rebounds in the third quarter

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September 10, 2020 The European Central Bank leaves interest rates unchanged and revises Eurozone growth estimates for this year to -8% from -8.7% estimated in June.

So + 5% in 2021 and + 3.2% in 2022. This was announced by the president of the ECB, Christine Lagarde, during the press conference following the board meeting.

The ECB's June estimates saw GDP at -8.7% this year, then + 5.2% in 2021 and + 3.3% in 2022. 

The main interest rate therefore remains steady at zero, the rate on deposits remains at -0.50% and the rate on marginal loans at 0.25%.

After the 11.8% contraction in the second quarter "the information in our possession and the results of the surveys indicate a continuous recovery of the euro area economy and indicate a strong rebound in GDP growth in the third quarter", also if the level is lower than in the pre-pandemic period ", but" the prospects for recovery continue to be surrounded by uncertainties due to the coronavirus emergency ", he added." The increase in coronavirus infections during the summer represents headwind in the short-term prospects of recovery.

Looking ahead, a sustainable recovery will depend on the evolution of the pandemic and the success of the containment policies. "

" The Eurozone still needs broad monetary stimulus, "Lagarde said during the press conference following the meeting of the Governing Council.

The ECB maintains its estimate of 0.3% inflation in the euro area for this year and raises it from 0.8 in the June forecast to '1% for next year. The estimate of 1.3% for 2022 remains unchanged. According to Lagarde, low energy prices weigh. "We are ready to use all instruments to reach inflation targets," he said.

"The Governing Council discussed the appreciation of the euro but the exchange rate is not a target of our monetary policy", explained the president of the ECB, stressing however that the European Central Bank monitors

he will look "carefully" at the situation regarding the effects on inflation.

very likely It is "very likely" that the ECB will use "the entire endowment" of € 1,350 billion of its pandemic securities purchase program, the Pepp, explained the president of the central bank.

Eurotower confirmed that the 'pandemic' bond purchase program will go on at least until the end of June 2021.

"Ultimately our monetary policy tools have worked well," said Lagarde, emphasizing the progress made in recent months in alleviating tensions on the financial markets.