ECB sees smaller-than-feared Covid impact, but slower recovery also

ECB president Christine Lagarde now expects a slightly less damaging Covid recession in the eurozone this year, but also a slightly slower recovery next year

The European Central Bank (ECB) expects the eurozone to suffer a smaller recession this year than earlier feared, but inflation is still likely to undershoot its target for years to come, it said.

In what it describes as the baseline scenario, the ECB expects GDP to shrink by 8% this year, an improvement on the 8.7% contraction it expected in June, ECB president Christine Lagarde said.