Eurozone to shrink between 8% and 12% in 2020
Thursday, 05 28 2020, Category: Economy, Country: Europe
European Central Bank President Christine Lagarde on Wednesday warned that the eurozone economy will likely shrink by between 8% and 12% this year, a deeper downturn than previously anticipated, as governments battle the coronavirus pandemic.
Ms. Lagarde's comments are the latest signal that the ECB is preparing to increase its stimulus as soon as next week, in an effort to shore up plunging economic growth and inflation. Analysts expect the bank to vastly scale up a recently unveiled 750 billion-euro ($821.6 billion) bond-buying program at a policy meeting on June 4.
Speaking at an online youth dialogue backed by the European Parliament, Ms. Lagarde said recent expectations of a 5% economic contraction for the euro zone this year were "very likely... out of date."
Instead, the region's economy would likely contract by somewhere between 8% and 12% this year, or around double the rate during the 2008-09 financial crisis, she said.