ECB's Lagarde Says Economic Risks Are `Broadly Balanced'

The video discusses the impact of higher energy prices and base effects on inflation, noting that these factors should diminish by early 2022. It highlights near-term inflationary pressures due to stronger demand and supply chain costs, but notes that weak wage growth and euro depreciation will keep price pressures subdued. The medium-term outlook expects inflation to rise, supported by monetary policy, but remain below target. The risk assessment sees balanced economic risks, with potential for stronger growth if consumer spending increases or the pandemic situation improves, but warns of underperformance if the pandemic worsens or supply shortages persist.

How does the text describe the relationship between wage growth and price pressures?

What is the expected trend of inflation over the medium term as the economy recovers?