According to the Eurosystem’s June projections, euro area growth is expected to slow in the third quarter this year as frontloading unwinds, Lagarde told the International Business Council of the World Economic Forum in Geneva recently.
Recent trade deals have alleviated, but certainly not eliminated, global uncertainty, which persists on account of the unpredictable policy environment, she noted.
The euro area economy proved resilient earlier this year in the face of a challenging global environment, and this has largely been due to two factors, she said.
First, Europe’s export-oriented economy has benefited from the global frontloading, growing by more than expected in the first quarter of the year. The second factor underpinning the economy has been stronger private consumption and investment, which have contributed positively to growth. Moreover, the labour market remains robust, she said.
Despite recent trade tensions and substantial uncertainty, global growth has remained broadly steady so far, and the resilience has been mainly driven by tariff-induced distortions of economic activity, she added.
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