Speaking before the European Parliament’s Committee on Economic and Monetary Affairs, ECB President Christine Lagarde said the Eurozone economy should find support from rising labor income and resilient employment. Investment in defence, infrastructure and digital transformation is also expected to underpin growth, even as the region faces higher tariffs, a stronger Euro and ongoing global policy volatility.
She pointed out that real wages growth have moved above early-2021 levels, reflecting inflation that has fallen below nominal wage gains. Although wage growth is still elevated, it is gradually moderating and expected to settle near 3% over the medium term.
Lagarde reaffirmed that the ECB sees inflation stabilizing around its 2% target. That assessment supported the decision earlier this month to keep key interest rates unchanged.
Looking ahead, she emphasized that policy will remain data-dependent and assessed meeting by meeting. “”We are not pre-committing to a particular interest rate path,” she reiterated.
