Economic Outlook Clouded by Uncertainty

European Central Bank (ECB) President Christine Lagarde highlighted on Thursday that the economic outlook is "clouded by exceptional uncertainty," particularly due to tariffs imposed by the United States. The exact impact and scope of these tariffs "remains unclear," adding to the challenges faced by the euro area economy.

Signs of Stabilization Amid Challenges

Despite these uncertainties, Lagarde noted that the euro area economy is likely to have experienced growth in the first quarter, with the manufacturing sector showing signs of stabilization. However, she cautioned that the prevailing tariffs could deter consumer spending and weaken investment, posing significant risks to economic recovery.

Call for Urgent Policy Actions

Emphasizing the need for decisive measures, Lagarde stated that it is "even more urgent for fiscal and structural policies to make the euro area more competitive, productive, and resilient." This call to action underscores the critical juncture at which the euro area economy finds itself, necessitating robust policy responses to navigate through the current uncertainties.