The European Central Bank (ECB) raised its GDP growth forecast for the euro area in 2021 to 4.6 percent from 4 percent expected in March this year, and raised the forecast for 2022 to 4.7 percent from 4.1 percent, ECB President Christine Lagarde said. In 2023, the ECB expects 2.1 percent GDP growth (unchanged as compared to March expectations).
"Overall, we view the risks to the growth outlook for the euro area as broadly balanced. On the one hand, an even stronger recovery could be due to the better outlook for global demand and a faster-than-expected decline in household savings after lifting social and travel restrictions. On the other hand, the ongoing pandemic, including the spread of the virus mutation, and its impact on economic and financial conditions are still a source of risk," Lagarde said.
The ECB currently expects annual HICP inflation in the euro area at 1.9 percent in 2021, 1.5 percent in 2022, and 1.4 percent in 2023, Lagarde said. In March, the following were expected: 1.5 percent, 1.2 percent, and 1.4 percent, respectively.