ECB's Lagarde Says Risks 'Remain Tilted to the Downside'

The transcript discusses the current economic conditions, highlighting weak manufacturing and expanding services. Consumer confidence is fragile, but recovery conditions are present. Inflation rose to 2.4% in December, driven by past energy price drops. Food and goods inflation decreased, while services inflation increased. Inflation is expected to stabilize around 2% in the medium term. Economic growth risks include global trade friction, geopolitical tensions, and prolonged monetary policy effects. However, easier financing and falling inflation could boost domestic consumption and investment. Euro area interest rates have risen, reflecting global market trends.

What is the current state of consumer confidence according to the economic analysis?

• Declining rapidly

• Fragile and cautious

• Stable and growing

• Strong and optimistic

What primarily caused the recent increase in annual inflation?

• A rise in manufacturing output

• A drop in energy prices from previous months

• An increase in consumer spending

• A surge in global trade

What is the expected medium-term target for inflation?

• 1%

• 4%

• 2%

• 3%

Which geopolitical risks are mentioned as potential threats to economic growth?

• Trade tensions with China

• North Korea's nuclear program

• Russia's war against Ukraine and conflict in the Middle East

• Brexit negotiations

What has been the trend in market interest rates in the euro area since December?

• They have decreased significantly

• They have remained stable

• They have risen

• They have fluctuated unpredictably