Europe, under pressure from US tariffs and the war in Ukraine, is in a strong position to weather the next economic storm, ECB President Christine Lagarde said Thursday.
With inflation in the eurozone hovering around the European Central Bank’s two percent target in recent months, “we are in a good place, and we are well positioned to face future shocks,” Lagarde said during an event at the International Monetary Fund in Washington.
“We have to face key risk in quantities that we could not anticipate,” she said, citing, among other things, customs pressures and the ongoing war in Ukraine.
“We had uncertainty, granted, but eventually this driver was not as bad as we had anticipated,” she added.
Many analysts predicted that the increase in US tariffs on European exports, which were ultimately set at 15 percent after tough negotiations, would cause a major shock to growth and a resurgence of inflation in the eurozone.
However, the shock has — so far — been less pronounced than feared, with a stronger euro helping to reduce imported inflation.
Earlier this week, the IMF revised its growth forecast for the eurozone for 2025 upwards to 1.2 percent, thanks to the robust health of the Spanish economy and a slight improvement in Germany and France.
