The European Central Bank expects a decline of "5 to 12%" of the gross domestic product of the euro area this year, reflecting the "great uncertainty" around the economic impact of the coronavirus, announced Thursday its president Christine The guard.
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This violent recession should be followed by a "recovery" if the containment measures are gradually lifted, but "its speed and its magnitude" are themselves "highly uncertain", continued Ms. Lagarde at a virtual press conference .
"The eurozone is facing an economic contraction of magnitude and speed never seen in peacetime," she said.
In the first quarter, GDP in the euro area has already registered a historic plunge with a decline of 3.8% according to data released Thursday by the European Statistics Office Eurostat.
"Given the great uncertainty surrounding the economic impact (of the pandemic), the growth scenarios produced by the ECB suggest that GDP could drop by 5% to 12% this year," she explained.
"The fall in economic activity in April suggests that the impact will probably be more severe in the second quarter," said Lagarde.
Growth should "normalize in the following years", further detailed the President of the ECB but "the extent of the recovery" depends in particular on the duration of restrictive measures and the "success of policies intended to limit the impact on income and employment ”.
In addition, the marked deterioration of the economy should have "a negative effect" on inflation "in the coming months", according to Ms. Lagarde.