ECB President: Weak GDP, low interest rates pose global challenge

From left, European Central Bank President Christine Lagarde, European Commission President Ursula von der Leyen and European Council President Charles Michel attend an event to mark the 10th anniversary of the entry into force of the Lisbon Treaty at the House of European History in Brussels, Sunday, Dec. 1, 2019. (AP Photo/Olivier Matthys)

OAN Newsroom
UPDATED 7:39 AM PT — Tuesday, December 3, 2019

The President of the European Central Bank (ECB), Christine Lagarde, is warning of ongoing economic slowdown in the eurozone. While speaking in European Parliament on Monday, she said economic growth remains weak across the European continent, while low inflation continues to suppress consumer demand.

Lagarde also pointed out the eurozone’s GDP rose just 0.2 percent last quarter, while inflation remains at 1 percent. This is way below the ECB 2 percent target. Experts say a global economic slowdown and Brexit-related fears are holding back overall growth. Lagarde added, weak GDP expansion also affects foreign trade.

“This in turn lowers demand for euro area goods and services, and it also affects business sentiment and investment,” she explained. “As the sector most directly exposed to these global developments, the manufacturing industry has been suffering the most.”

Lagarde, who took office last month, warned central banks worldwide against keeping interest rates artificially low. She said the ECB will now work towards normalization of its borrowing costs and balance sheet.

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