Lagarde: Inflation Risks Are 'Tilted to the Upside'

The transcript discusses the economic outlook, highlighting potential stronger performance if household confidence increases and savings decrease. It notes that while pandemic-related uncertainties have lessened, geopolitical tensions and high energy costs pose risks. Supply bottlenecks and inflation risks are also considered, with inflation potentially rising if wage increases occur or the economy reaches full capacity sooner than expected.

What could lead to a stronger economic performance than expected?

• Increased household confidence and reduced savings

• Higher taxes on businesses

• A decrease in government spending

• Stricter immigration policies

What has increased despite the abatement of pandemic-related uncertainties?

• Global trade agreements

• Geopolitical tensions

• Technological advancements

• Environmental regulations

How could high energy costs affect the economy?

• By boosting consumer spending

• By increasing the supply of goods

• By reducing the need for investment

• By exerting a stronger drag on consumption and investment

What is a potential risk to the outlook for growth and inflation?

• Rapid technological innovation

• Resolution of supply bottlenecks

• Persistent supply bottlenecks

• Increased foreign investment

What could cause inflation to be higher than anticipated?

• A slower return to full economic capacity

• Lower than expected wage rises

• Price pressures leading to higher wage increases

• A decrease in consumer demand