Stagflation elements not seen in Europe yet, says ECB chief

By Ovunc Kutlu

ANKARA (AA) - European Central Bank (ECB) President Christine Lagarde on Monday said that stagflation elements have not been seen in Europe yet.

Stagflation occurs when inflation and unemployment remain high but economic growth slows down.

Euro area annual consumer inflation hit a new high of 5.9% in February, while consumer prices in the EU also jumped 6.2% year-on-year.

The ECB, on the other hand, has not yet raised interest rates despite record high inflation.

Speaking at the Paris-based think-tank Institut Montaigne, Christine Lagarde said the ECB's monetary policies will not be in sync with the US Federal Reserve.

Her comments came after the Fed last week raised its benchmark interest rate by 25 basis points, marking its first rate hike since December 2018. The US central bank also signaled it could make six additional rate hikes this year.

Lagarde also noted that policies to fight climate change are expected to be deflationary in the long run, but they could increase inflation in the medium term.