Christine Lagarde, ECB President, discussed euro area economic outlook, inflation, and monetary policy strategies during the European Parliament’s Economic and Monetary Affairs Committee hearing on June 26, 2026.
Christine Lagarde, President of the European Central Bank (ECB), delivered a speech at the hearing of the Committee on Economic and Monetary Affairs of the European Parliament on June 26, 2026.
She reviewed recent economic data, noting that euro area real GDP grew by 0.3% in the first quarter of 2026, with a slowdown due to geopolitical tensions and supply shocks. The outlook projects GDP growth of 0.8% in 2026, 1.2% in 2027, and 1.5% in 2028.
Inflation rose to 3.2% in May, driven mainly by energy prices, which increased above 10%. Inflation expectations remain anchored around 2% over the medium term. The ECB expects inflation to decline to 3.0% in 2026, 2.3% in 2027, and 2.0% in 2028.
The ECB raised its key interest rates by 25 basis points in June, citing the need to ensure inflation stabilizes at the 2% target. The decision was based on a data-dependent, meeting-by-meeting approach, considering the uncertain outlook due to geopolitical risks and supply shocks.
Lagarde explained the ECB’s monetary policy strategy, emphasizing assessment of supply shocks’ size, persistence, and propagation, as well as risk scenarios. The strategy supports proportionate responses, adjusting policy based on the shock’s nature and evolution.
She highlighted the importance of structural resilience, especially in the energy sector, to mitigate external shocks. The speech concluded with thanks to the European Parliament and progress on the digital euro project.
