ECB Chief Warns of Challenges to Global Inflation
(MENAFN) European Central Bank (ECB) President Christine Lagarde issued a cautionary message on Friday, noting that the ongoing intensification of worldwide trade frictions is adding complexity to the inflation forecast.
"While the international community has benefited from an increase in trade and a reduction in barriers over many decades, the escalation of trade tensions and the imposition of tariffs have created strong headwinds for the global economy," she remarked in her address at the International Monetary and Financial Committee gathering in Washington, DC.
Lagarde highlighted that worldwide price pressures are predicted to decrease progressively, owing to loosening labor conditions in wealthier nations and the cumulative effects of recent monetary policy restrictions.
Still, she emphasized: “However, the ongoing escalation of trade tensions complicates the inflation outlook."
She stressed that tariffs have the potential to cause volatility in currency markets, influence the cost of imported goods, and hinder supply chain operations — all contributing to unpredictable inflation effects.
"Geopolitical tensions continue to present two-sided inflation risks as regards energy markets, confidence and investment," she added.
Lagarde further stated that most indicators reflecting the underlying pace of inflation suggest it will align sustainably with the ECB's mid-range goal of 2 percent.
She reaffirmed the institution’s resolve to secure lasting stability around that inflation objective.
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