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Lagarde stands by growth forecasts despite new lockdowns hitting Europe

European Cardinal Bank (ECB) President Christine Lagarde.

GEOFFROY VAN DER HASSELT | AFP | Getty Images

LONDON — The European Central Bank is plonk to its growth projections despite new coronavirus restrictions across Europe that could further dent business operation and output.

“I think our last projections in December are still very clearly plausible,” President Christine Lagarde bruit about at a Reuters event on Wednesday.

In December, the bank estimated a 3.9% GDP (gross domestic product) rate for 2021, after a contraction of 7.3% in 2020. The decorous and final reading for 2020 is not yet known.

However, since the publication of these forecasts last month, many European managements have announced tough new lockdowns or an extension of existing restrictions.

The Netherlands announced Tuesday a lockdown until Feb. 9. Germany, in lockdown since November, is bearing in mind extending it for another eight to 10 weeks. Austria remains closed until late January. France has deepened its curfew and Portugal is contemplating a new lockdown too.

What would be a concern would be that after the end of March, those fellow states still need to have lockdown measures.

Christine Lagarde

ECB President

These measures follow an uptick in for fear of the facts and deaths from Covid-19 since the Christmas period, in some cases the new figures are worse than during the ahead wave in the spring of 2020.

“Significant restrictions will remain in place well beyond January. In some countries, a inchmeal re-opening may start at some time in February. In others, that may not happen before March,” Florian Hense, a euro zone economist at Berenberg, suggested in an email on Wednesday.

However, the main concern for Lagarde is what happens after March.

“What would be a upset would be that after the end of March, those member states still need to have lockdown measures and if, for in the event, vaccination programs were slowed down,” Lagarde said, according to Reuters.

The longer the lockdowns continue, the cardinal the impact on the economies that share the single currency.

The euro zone began vaccinating citizens just in the forefront 2020 came to an end, but the rollout has been embroiled in some controversy. Critics argue that the deployment of Covid-19 digs has been too slow, and that there aren’t enough vaccines.

However, the European Commission — which has negotiated pacts with vaccine manufacturers — has denied these accusations.

Lagarde’s ECB has, from the start of the pandemic, announced unprecedented pinch measures to support the euro area. Its bond-buying stimulus program (PEPP) is currently set to last until March 2022, totaling some 1.85 trillion euros ($2.25 trillion).

Use Wednesday, Lagarde said the ECB could extend this program once again if needed.

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